Over the weekend, a strong rally was stifled by an even stronger rejection as the bitcoin market was shoved into a band of overhanging resistance. This band of resistance has been mentioned several times in our analyses over the last few weeks as it has proven impossible to overcome for the time being:
Figure 1: BTC-USD, Daily Candles, Failed Breakout
This run to the low $ 4,000s coincided with a breakout of a rather large symmetrical triangle consolidation shown above. It managed to establish a new, local high but was immediately rejected on high volume and very high spread. This rejection formed a candle called a “bearish engulfing candle” that completely wiped out a week and a half’s worth of gains in just a couple hours.