[Guest Post] This Bitcoin Analysis has been provided by Cryptomedics (read the full review of their service here)
We are still very bullish at this moment. Reasons for a reversal of this short-term uptrend are lacking and this “dump” is not a reversal-dump, meaning we will see a higher high (above 8500).
Compare reversal dumps and accumulation dumps with this one. You will see this is an accumulation dump.
To see the sentiment of the market, we had a test with WV ETF rejection, and we slingshotted back up, then we had a dump yesterday, slingshotted back up. This is clearly a sign that we have a shit ton of buyers in the market right now
At the moment everything (including the News about BTC) points out a bullish market sentiment. BUT as everyone is waiting for the BTC ETF to be approved/disapproved this could mark a turning point in sentiment and could decide about how our third BTC rally approach turns out. For now, Bitcoin’s short-term bullishness remains relatively strong.
The important third rally attempt
After a bear market and establishing a bottom, markets usually need a few attempts. When an asset fails the first rally, it usually bounces again at the established support level and attempts another rally (second attempt). If the second attempt to establish a bull market also fails, we are getting into dangerous territory. Now, we rely on the third attempt (This is where Bitcoin is at the moment). But why is the third attempt so important? Throughout history, markets have shown that they rarely give fourth or fifth chances. If an asset can’t establish a bull trend after the third rally attempt the likelihood of breaking market structure (following below a long established support level) and establishing a bear trend increases dramatically.
Gold failed to establish a rally after the third attempt
After a great rally gold faced a heavy correction in 2011. Once a strong support was established gold started three rally attempts (see chart) but all of them failed. After the failure of the third rally gold went into a bear mode and hasn’t recovered ever since. This is just one evidence that markets are likely to give 2nd and 3rd chances, but they rarely give a 4th and 5th chance to establish a bull run