What we are seeing currently in the Bitcoin market is typical before decisive moves are happening. Everyone is expecting the market to move. However, less and less investors are interested in participating in the market. The result of that is that Bitcoin’s price is forming a lot of Doji candles on the 1 hour chart and even on the 4h chart. A lot of people try to interpret these candles whether their shadow points upwards (gravestone doji) or downwards (dragonfly doji) signaling upwards or downwards momentum.
However, as you can see in (fig. 1) the market forms several doji candles with conflicting meaning. Therefore, the only thing that you can deduct from it is that the market is in an indecisive state. All the while volume is lowering (fig. 2). The market participants wait for the next big move and try to react. As a consequence, just in these moments it is easy for whales to give the market a shove in either direction. As happened on the 15th of May. When a whale moved 12,000 BTC to Bitfinex. However, the basic tendency of the state is bearish as the indecisiveness occurred during an uptrend. But this is just one indicator. Another big indicator is to watch out for the bottoms that are forming.
The indecisiveness of the market is not reasonable. As a smaller fish you cannot reach a critical mass to move the market. So you try to wait for clearer signals. If a correction would now occur the markets would form lower lows on the chart.
The 4h chart is still clearly bullish. Bitcoin is forming higher lows and it even forms a continuously steeper trend. However, the daily chart tells us that the trend is not settled yet.
As you can see in (fig. 4) another green doji candle is about to form. It has little significance to call it a strong bottom. Already the next few bars could continue to form new lows. However, if these are in fact above the 7200 signal. We have a strong signal that suggests that the bull market does continue. So, have a plan for both possibilities. Set reasonable stop/losses if you are in the market. Big moves either way are likely to happen.
DISCLAIMER: This article is no trading advice and serves only to inform. DYOR
