Bitcoin (BTC) Bullish Setup Still Remains Valid

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Bitcoin (BTC) seems to be caught up in some serious bearishness short term but the near term outlook still remains positive. If we look at the 4H chart for BTC/USD, we can see a diamond formation that is quite significant. Historically, diamond formations have worked well in this market. The last time we saw a similar diamond formation, we saw a big move to the upside in Bitcoin (BTC). The same could happen this time but traders need to be cautious as the stakes are too high and the market makers and whales are unlikely to just give the trade to them. They are going to make them fight for it which means we could see the price invalidate the diamond formation short term but it that does not change the bullish setup.

The thing that traders often do not realize is that the same percent move to the upside or to the downside does not mean the same thing especially in Bitcoin (BTC). For instance, the price would have to rise just above $16,000 to rally 100% in value from current levels but it would have to go to zero to fall 100%. The same goes for other moves. For instance, a move towards $10,300 does not seem as hard as a move towards $5,500 yet both are similar moves in terms of percentage. Let us now take a look at the ETH/USD chart. You can see that we have moved some trend lines because recent moves changed the outlook. This does not invalidate the bullish setup however and we are still likely to see an uptrend follow from here.

The daily chart for EUR/USD is also a good indicator of what could happen near term. As we can see the pair has broken out of a falling wedge but it could still fall back within this wedge. If that happens, BTC/USD will take the fall with it. However, we can see that both EUR/USD and BTC/USD are primed for a bullish trend reversal and they are likely to get it sooner or later when the dust settles. Let us now take a look at the weekly chart for BTC/USD. We can see that we have a similar situation as December, 2018. The difference is that this time the price has found support on the 50 EMA and back then it found support on the 200 day EMA. We saw an uptrend follow soon afterwards last time and we are likely to see the same happen this time as well.

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