Bitcoin (BTC/USD) has been consolidating above $6000 and recently got into a range between $6200 and $6600. I noted that bitcoin's price bottom attempt looked weak. ut, instead of continuing the July-August downtrend, it broke above $6600.
The bullish breakout was brief and the market soon faded this rally, sending price back into the consolidation area. If price does not stay above $6400, we should consider that bullish breakout a false breakout. This type of price action would confirm the weakness of the price bottom attempt.
BTC/USD 4H Chart
- As we can see, the break above $6600 completed a price bottom.
- However, price is retreating just as fast, and threatening to break below the $6400 area, which would be a support pivot IF the market is indeed bullish.
- Instead, a break below $6400 would put pressure back towards $6200, $6000.
- So what happened here? To me, it is just noise ahead of SEC's decision of ProShare's Bitcoin ETF. I think the market is expecting a a rejection, but wants to keep hope alive. That's what this price action is telling me.
- There is also the fact that shorts on bitcoin was near all-time-high, setting it up for a short-squeeze.
Bets Against Bitcoin's Price Are Nearing Record Highs (Coindesk)
- Because this rally occurred during Bitmex's maintenance downtime, there are opinions that there was a "forced short-squeeze" during this time, when bitmex trader's (who are the shorts), were not able to trade.
Crypto Markets See Green Amid Talk of 'Forced Short Squeeze' on BitMEX (Cointelegraph)
- At the end of the day, the market is jumpy ahead of another SEC announcement, which will likely end up disappointing speculators.
- With the short-squeeze out of the way, Bitcoin has even more likelihood of falling below $6000 after the 8/23 SEC decision.
SEC Faces Thursday Deadline for ProShares Bitcoin ETF Decision (Coindesk)
- Of course, a surprise positive decision would likely send Bitcoin surging above $7000 and likely towards $8000 by next week.