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It’s been two and half months since Tesla Broke up with Bitcoin and China Started to send loads of FUDs, and Bitcoin started to range between $30,000 to $40,000. However, it broke below $30,000 briefly during the period. By looking at the chart of Bitcoin we see resistance above $40,400 with almost 70 days of consolidation. At the H4 frame,
the last bars have a down trend with decreasing volume which is a possible sign of reversal of the current downtrend and the lower support of $38303 can act as local support, given no FUDs. If the reversal happens and the price breaks above, we have two scenarios to expect.
Bitcoin Two Scenario Movement: Scenario 1
This will be a slow and steady process where Bitcoin will strengthen its price and secure liquidity between the current support and resistance. In this case, the price will break above the resistance with a gradual pace having significant volume spikes, and move to upper psychological resistance.
Bitcoin Two Scenario Movement: Scenario 2
Scenario 2 will be a sudden pump of price, possibly with low volumes and break above the resistance. The volatility will be much higher making new highs briefly. This will, however, be a fake pump and the price will return to the level it started.
Scenario 1 is optimal to trade as it will encourage a dynamic price movement however the other scenario 2 is too dangerous to trade.