Bitcoin (BTC) Finally Touches $5,800, What Happens Next?

Bitcoin 5 3 2019 LearnCrypto Powered By Wyckoff SMI 2024

Bitcoin (BTC) has finally touched the $5,800 mark. The price retraced strongly after barely climbing above the mark but it can be said to have tested market structure now. That being said, we can still expect this rally to go further but there does not seem to be much room for that. It is alarming though that the number of margined shorts for BTC/USD still remains too high. That opens up the possibility of a short squeeze, but needless to say the price is due for a major decline in the grand scheme of things. Chasing the price at this point would be extremely unreasonable as Bitcoin (BTC) remains heavily overbought on the 4H, daily as well as weekly time frames. While the possibility of a short squeeze might get a lot of bulls excited, it is important to realize that BTC/USD has been long overdue for a decline now.

It is not possible for the price to sustain its current manner of movement in which it trade sideways and then pumps to the upside. This cannot persist for long and eventually the price will have to decline in a major way as we have long been anticipating. That being said, most bears are still too confident expecting the price of Bitcoin (BTC) to decline anytime now. This does not have to be the case and maybe the bears will learn the hard way in case we see a short squeeze. Bitcoin volatility index fell by more than 40% today as the price made a big move to the upside. The volatility index is expected to continue to decline in the days ahead till it bottoms. When the Bitcoin Volatility Index (BVOL) bottoms out, that is when we could expect the next downtrend.

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We have seen BTCUSDShorts keep on piling up the past few weeks. The bears got too excited too soon but they are still pretty excited. As long as retail bearish interest is this high, the whales are unlikely to pull the plugs. This is because retail traders or the dumb money is wrong most of the time. They are too predictable and the market makers just love to take their money every single time. This time could be no different and the large number of margined shorts could be up for a huge surprise if Bitcoin (BTC) makes a big move to the upside.

All that being said, this is not over and BTC/USD is not out of the woods. It is equally alarming to see that people are still too optimistic. This is not usually the case when a bear market ends. Long periods of downtrend eventually force retail traders or the dumb money to give up so the smart money can accumulate. That has not happened so far and we still have a lot of money boys including some top analysts who believe BTC/USD could rocket straight to $9,000 from here. When everyone is thinking the same thing, it is best to start looking the other way.

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