Bitcoin ended the week unconvincingly as another attempt on $8,800 was fiercely beaten back, representing the second time in twenty-four hours that this attempt has failed, causing bearish sentiment to sweep through the markets. With the parabola that took us from $3,500 to the brief top at $9,100 now broken, a pull back is more likely than ever, which could bring the much-promised alt season, depending where BTC lands if it falls.
Dragonfly Spells Trouble
BTC printed a dragonfly doji on the weekly close after only one negative week in the past 15, the first sign of weakness since early April. The dragonfly is not bearish in itself, but it signals that a potential market reversal is imminent. The weekly volume has also been tailing off gradually and the fomo that helped propel us to the current region, which was unthought of a few weeks ago, has clearly abated, all of which comes together to suggest that it might be a good time to retreat to your stablecoin of choice while the market decides on its next moves.
— Mac ❄️🐺 (@MacnBTC) June 3, 2019
Buying the Dip
As to where BTC might correct to, $8,400 and $8,200 are the first important areas of resistance. Sitting around these areas might usher in the confidence for an alt rally, but if those levels break then we could be in line for a more serious correction which will undoubtedly take alts with them. The reaction to this morning’s rejection of $8,800 saw BTC scraping $8,400 and bouncing back again, so the next 24-48 hours will be crucial to determine the market’s health. In terms of the bigger picture, those who are seeking a larger retracement to buy back in on might be out of luck according to one trader, who points out that there were no 50% dips on the way from $200 to $20,000. Of course BTC is very good at doing what no one suspects, this could be an interesting pattern to bear in mind when placing bids.
I keep reading that people want a 50% dip or more to buy in. Reminder that on the prior 100x bullrun from $200 to $20,000, we had precisely zero 50% dips pic.twitter.com/RsI6yrF5LF
— BomboBTC (@BtcBombo) June 3, 2019