I think we have a much bigger chance that this rally WILL succeed, compared to the rally of Sunday. We have a much more solid foundation this time. Still does not give a guarantee of a (big) rally, could still make a drop before jumping up. But those chances are very small this time .
We have a very strong rally now, that’s for sure, reasonable chance we made a (temp) reversal yesterday. But the market is still not over confidently to just buy and FOMO again. Trust has been damaged to much the past month, with the continuing drops we have seen.
The ones who got in at the lows will probably take some profit at these levels as well. So there is a big chance we will go sideways again for a day or a few days even. Unless whales are able to create a short squeeze, i don’t think we will see a massive continuation of the rally right away. That would only be the case if this is a long term low and buyers are getting in heavily (with ).
So far we only can assume that this is just an upwards correction of the downtrend. A break of the 6800 would be a first (small step) to prove otherwise. For me the 10K is the level to break to say the downtrend is really over, so it’s a very long way to go. If bulls are able to get it above the 8000, than things might rally change again.
For the short term, it’s difficult to say what will happen. I think the purple line in combination with the blue line have the biggest chance to succeed. If the 6300 can hold as support we should assume that the 6700/6800 can be reached quite easily (blue line). It would keep momentum the highest for the bulls. 6100 would also be a healthy correction of this rally, but should see buyers coming in between the 6050/6150 (purple line). These 2 scenario’s have the biggest chance at the moment. If we do see a drop towards the lows again 5800/6000 (red line), would probably give a good opportunity for buyers to get in that missed out on yesterdays low. This scenario looks kind of weak maybe, but IMO 1.93% it’s more for the midterm if bulls are able to create a solid foundation for a bigger rally. Even more than the blue/purple scenarios.
Of course there is always a chance that the correction is already over and that we break the 5800 this weak, if that happens, than we could assume the V shape low could be in play because i think that allot of people will get desperate and start to dump again. At the moment i think it’s much more likely that we see above the 6500 before even getting close to break the 5800 again. I think these scenarios depend on how big the FOMO factor is. Even though allot of inexperienced keep falling for the same trap over and over and over and over again, think we can assume that at least a % of these people have learned their lesson in 2018, so FOMO factor might be a bit less than it used to be. But of course, if the market just keeps pumping up we all know the FOMO virus will be spread all over again. As long as stays low, FOMO will be less significant.
Credit: Trading View