February 26, 2024

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Bitcoin Analysis: Deep Short-Term Correction – BLOX

Bitcoin Analysis: Deep Short-Term Correction – BLOX

Since the beginning of that year we saw the price move upwards and it ended up above $45,000. In yesterday's analysis, I discussed the daily chart with different indicators that gave clear reasons for the upcoming trend reversal. In today's analysis I will take a closer look at the short-term charts.

My predictions for today

In the image below you can see the 15-minute chart. Each candle represents 15 minutes, which means that we are now really looking at the short term. As you can see, Bitcoin has formed a triangle pattern on this chart. This is also called an ascending triangle. We are seeing higher lows and higher highs in equal measure. This pattern falls within what are called “continuation patterns.” This means that the price often pushes in the direction in which the price entered the pattern. As it is clear, Bitcoin fell from the top of this pattern, so the price is expected to break this pattern to the downside.

The first and strongest support will be around $44,300. This is the level that led to the big rally above $45,000, and if the price drops to this point, it is very reasonable to expect a rally here.

Several long positions have been opened

While the price of Bitcoin saw a significant increase, we see that open interest rose with it. This means that positions were opened during the rally. So these are long positions.

We often see that when there is a significant increase in positions, they are removed first before the price chooses a direction, which therefore means that we are in a decline. This data should be viewed as a confirmation of the possibility of a downward breakout of the pattern created by Bitcoin in the short term, in other words: simply to liquidate long positions.

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