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Bitcoin Price Rally Is Starting to Reverse

On Friday, I posted the short-term bearish case for BTC. However, there is another pattern that I've spotted in the charts. Since the June lows, BTC seems to be forming a broadening ascending wedge or accumulation cylinder. I've outlined two potential paths for this.

Given we are sat on top of the 2017 ATH, and this pattern is part of a much bigger bullish structure (descending broadening wedge), I am leaning towards the black scenario. On the 1H chart, you can see just how important that bottom green trendline has been in recent weeks.

BTC has followed equities for some time now. So, are there signs that indices are also bottoming? This SPX chart suggests that we are forming a huge channel that connects the covid crash to a potential bottom here. Again, a broadening descending wedge hints at further upside.

The DXY also continues to look toppy, with bearish divergences on the weekly at the top of this 15-year channel.

And on the 1D DXY chart, you can see we lost a major trendline back in July and have since been backtesting this as resistance.

The risk:return doesn't look good here for bears, and there are many reasons to believe markets are about to reverse, just as sentiment hits extremes. @GameofTrades_ @HenrikZeberg and @RaoulGMI have produced great analysis of both fundamentals and technicals that support this.

This post is based on this twitter thread.

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