Bitcoin - Bearish double top or bullish cup and handle ?As CRYPTOCAP:BTC reached a new high, we got a clear double top setup unfolding.
The question is now how this will unfold ? Honest answer : We can't know as price can unfold in many different patterns from here.
For now , we have to respect the bearish double top setup and therefore remain bearish on this as long as price is below 109.600$ .
BUT seen the somewhat good general market context for now and the potential for a surge in bitcoin demand, we have to be open to the possibility to turn bullish here when possible.
A double top setup can easily turn into a cup and handle setup, that means we could see price consolidate some more before rising again. But for that to happen, we need price to hold some key support levels , which for now is the 20day EMA in green on my chart. IF the 20dEMA is broken, we can simply look for the 50dEMA in black as the next potential support zone.
Also, from an Elliott Wave perspective, it's quite simple, if price move above the 78.6% Fibonacci retracement level, although not always, more often than not we see price go up to the 127.2% and 138.2% levels around 120K here.
So, what can we do from here ?
For the bulls ? Simple, stay out and only look for setups on key support as mentioned above, for now you can use the 20dEMA for a small long entry with a very tight stop.
For bears ? Respect the short side as long as possible and use the support zones for profit taking and if support breaks look for new entries or to add to your positions if you want to be more aggressive.
