Bitcoin : The psychology of 3 phases of break out.
Bitcoin is trending slightly below the support trend line which however giving us another confirmation that the bears are currently under control of current whole structure. The level of confidence on this market is diminishing over time as the price is approaching the resistance zone in higher degree. Here in this current condition, I believe that the price is currently forming the 2nd phase of break out strategy. Here below the psychology of every phase in the break out strategy.
Phase 1. The Initial break out
This is the phase where suddenly the bears appear at the a certain level and the price are getting pushed further down to the support region. When the retailers see any sign of a push like this, there will be fear comes and they started to sell their holding as the whales drive the price down too making it has a breaks down below the support.
Phase 2. Retesting the previous broken support as resistance
As the price goes lower and lower, the whales takes any chance as the asset enters the oversold region. They react to it with a buy back at the lower zone and start to pump the price this is however making the price to go against the major trend. A lot of traders are faked during this moves They usually enters a short at the phase 1 but actually, it's better to enter it at the phase 2. I see the yellow and the white support trend line as the short term resistance which the price is now testing it as a resistance. Once we see any sign of rejection, there will be the "Real" confirmation of break out.
Phase 3. The real break out
This is the phase where the price is having its real break out after the rejection confirmation on the phase 2. If you enters a short after seeing this kind of action, you'll have an excellent risk to reward and a low risk trade. I see the potential phase 3 downside moves to the $10583 region as the next support zone.
On short term, Maybe we will see any sign of bearish moves because it's what we always see at the consolidation. Beside, the price needs a rest to gain more momentum before continuing the push higher to the upside. I see it very logical to test the $10000 region as there hasn't been any retest toward this zone after the break out. But for longer term, It's a healthy market with a lot of trust from the stakeholders and it will be a very very bullish market coming after this consolidation ends.
Phase 1. The Initial break out
This is the phase where suddenly the bears appear at the a certain level and the price are getting pushed further down to the support region. When the retailers see any sign of a push like this, there will be fear comes and they started to sell their holding as the whales drive the price down too making it has a breaks down below the support.
Phase 2. Retesting the previous broken support as resistance
As the price goes lower and lower, the whales takes any chance as the asset enters the oversold region. They react to it with a buy back at the lower zone and start to pump the price this is however making the price to go against the major trend. A lot of traders are faked during this moves They usually enters a short at the phase 1 but actually, it's better to enter it at the phase 2. I see the yellow and the white support trend line as the short term resistance which the price is now testing it as a resistance. Once we see any sign of rejection, there will be the "Real" confirmation of break out.
Phase 3. The real break out
This is the phase where the price is having its real break out after the rejection confirmation on the phase 2. If you enters a short after seeing this kind of action, you'll have an excellent risk to reward and a low risk trade. I see the potential phase 3 downside moves to the $10583 region as the next support zone.
On short term, Maybe we will see any sign of bearish moves because it's what we always see at the consolidation. Beside, the price needs a rest to gain more momentum before continuing the push higher to the upside. I see it very logical to test the $10000 region as there hasn't been any retest toward this zone after the break out. But for longer term, It's a healthy market with a lot of trust from the stakeholders and it will be a very very bullish market coming after this consolidation ends.
