Bitcoin (BTC) recently invalidated a descending triangle and has now turned it into an ascending triangle. This is not something we get to see often but if you focus on the play here, this is not surprising at all. Trading is more about psychology than it is about drawling lines and patterns on a chart. There are a lot of traders who can draw good lines and patterns but they can’t make profitable trades. The reason that does not work is because if you can draw pretty lines and patterns, you are the market maker’s favorite victim. They will play with your mind to keep invalidating certain lines and patterns till you reach the conclusion that technical analysis does not work.
I am by no means understating the significance of lines and patterns on a chart. I’m saying that you can find most of them for free on the internet. You don’t even have to draw them yourself. To a lot of people, technical analysis is about charting which is the wrong approach. We need to focus more on the “analysis”. If we look at the lines and patterns that we have drawn on the 4H chart for BTC/USD, we can see that there is a large symmetrical triangle which has an ascending triangle inside of it that the price is currently trading in. It has become quite obvious now after the invalidation of the descending triangle and the formation of the new ascending triangle that the market makers want you to believe that the price can rally towards the top of the symmetrical triangle.
Looking at the RSI and the Elliot Wave Oscillator, I have no reason to refute that possibility. However, the real question is, “what happens after that?” Let’s say the price reaches $10,928 after breaking out of the ascending triangle. What is the game plan after that? Are the market makers going to let the bulls walk away with free money by pumping the price towards a new yearly high or are they going to trap them? Without going into technical analysis, just by common sense alone, it makes no sense for the market makers to trap 37% of the bears in comparison to 63% of the bulls at this point in the market. There are not many retail bears to shake out.
The people who are shorting the market here are mostly professionals. You can’t use the same scare tactics on them. These are people who are shorting BTC/USD knowing full well that there are people drawing large bull flags and pennants on the weekly charts calling for a breakout to a new all-time high. In other words, it is nerve wracking to be a bull here in the face of all those loud bullish voices. So, the people who are doing that are not your average retail traders. They know how to protect their downside and they are not intimidated by fake moves. The market makers are well aware of this which is another reason it is not plausible for them to try shaking out these people. Apart from all of that, we have a strong bearish indicator and that is the rising Bitcoin dominance (BTC.D).
I can’t believe that even some experienced traders on Twitter and other social media are projecting the rise in Bitcoin dominance as the beginning of a new trend as if this has not happened before. People like to complicate things because it makes them feel smart. However, any profitable trader who has actually made money trading will tell you that trading is about discipline, focus and letting go off your bias and not giving in to emotions at any cost. While the market may still rally higher from here the fact that Bitcoin dominance (BTC) has just found support above 71.71% after breaking out of the ascending triangle tells us that Bitcoin dominance is very likely to rise a lot higher and the only way that is going to happen is if the market were to fall again and altcoins were to fall harder than Bitcoin (BTC).
Source: Crypto Daily