FX.co ★ Bitcoin bulls unable to hold above $40,000.

Despite breaking above the $40,000 price level, Bitcoin bulls were not strong enough to keep prices above that level. Initially breaking above $40,000 was a bullish sign making us expect a move towards $42-45,000 was coming, however bulls were not strong enough. Has price given us a false breakout signal?

Red lines -trading range

Bitcoin since the low at $29,700 is mostly moving sideways between $41,000 and $30,000. The consolidation has lasted almost a month and it is very risky to predict the direction we will see after it exits the trading range. When market price forms such trading ranges I prefer to go long near the lower end of the trading range and go short near the upper boundary of the range. In case I'm wrong and price exits the range, my loss would be minimal as my position would be opened near my stop loss level. Usually when price consolidates like this after a strong downtrend, the break out of the trading range usually is to the downside. That is why I give more chances to the bearish scenario of a downward break out.

Bitcoin has so far retraced 50% of the rise from the 2018 lows. A move lower towards the 61.8% Fibonacci retracement is justified and still not ruled out. A move towards $26,000-$23,000 is very possible in my opinion and traders should be very cautious. Especially as long as price remains below $40,000. Even a move towards the 78.6% retracement at $16,000-$17,000 area is not out of the question either. As long as price is below $40,000-$41,000, bears remain in control of the trend.