First of all, I am no trading expert by any means. I've been studying the basic patterns, indicators & some traditional technical analysis and the following is my personal opinion on what's next.
Usually when a colleague or friend sees me drawing up a chart they have a good laugh, saying things like it's just bullshit and pure gambling. The truth is, they just repeat what they see and hear elsewhere, mainly because they don't take the time to educate themselves about it. That's fair enough.
But I've been studying intensively those charts, patterns and indicators in the last few months and it really helps to "predict" (note the quotes), to some extent, the direction. After all, it are indicators, they help you indicate what might happen next. They don't tell what is going to happen.
I don't think you can really accurately apply it on all crypto, but on the big assets like Bitcoin and Ethereum I think it works better, especially long term I think it works well. But I do get why people are sceptical, just have a look on Twitter for some Bitcoin charts, it's pretty bad.
What does it indicate?
The trendlines on above chart form a descending (or bearish) triangle. I initially had this one drawn up somewhere in the beginning of August, and no, I haven't adjusted the trendlines ever since. In any case, a descending triangle is a popular charting pattern that clearly shows that the demand for an asset is weakening and indicates that downside momentum is likely to continue or grow.
We've now been almost 9 months in a bear market and we're nearing the end of this triangle. Last night we had a huge spike in volume and our candle went clearly through the trendline, quite some online media were reporting today a Bitcoin breakout. We actually don't have a breakout yet. Yes we have some increasing volume which is good and is definitely something we need for a breakout.
But our candle did not close yet above the trendline, only the wick went through. As it's only the wick, this doesn't count as a breakout. To have a real breakout we need increasing volume and a full body close above the trendline. The day is not over yet but I think we'll stay within our triangle for now and will probably go down first before testing $6700 again.
As I said, when we close on the daily full body above the trendline, there's a good chance we're finally breaking out of this bear market and will start gaining higher highs again. If we break down out of this triangle we'll probably go and test the 5K support and worst case all the way down to 3K.
If we just go outside of this triangle sideways, I'm not sure what will happen. I have not enough experience to know and frankly nobody knows what will happen. I'd say we're most likely to go sideways in the 6K range for quite some time then.
Anyway, that's my take as a noob trader on it. What do you think?