Two major factors may cause Bitcoin to continue to fluctuate

Hello everyone, I am God K. I only like to study K-line. My friends call me “K-line maniac” and you can call me Lao K.

【K God said】

The weather has been unusual recently, so wear more clothes. Old and new friends can follow the "Coin Circle Live" public account to prevent freezing. Yesterday, the Bitcoin market rebounded with a positive line, but it cannot form a reversal for the time being. It will take some time to fluctuate. This fluctuation is determined by two major factors.

【News】

Yesterday was relatively quiet in terms of news. The expected follow-up policies did not come, and Bitcoin had a relative breathing opportunity. However, the lack of news yesterday does not mean that there will be no news in the future. Therefore, with the policy sword still hanging, it is difficult for the market to make a big move. After all, the government does not have the energy to play whack-a-mole with the cryptocurrency circle: hit it once, shrink it, and then pop it up again. This is a child's trick. Adults either slap it to death or wait for the next opportunity to slap it again if they can't kill it. It won't be so frequent. For example, they slapped it in 2013 and 2017. But it's also quite interesting that the policies all came out at a critical juncture of Bitcoin. I don't believe it's a coincidence. I can only say that it's high, really high. Look, today A-shares are booming. The first-minded funds have "understood" the intentions of the management, so A-shares rose first. As the old people joked in the past: Heshen fell, Jiaqing was full. Applied to the financial market, at present, the cryptocurrency circle fell, and the stock market was full. But in fact, the capital overlap rate of these two markets is not high. For those who have played in the cryptocurrency circle, there are only two possibilities for going to the stock circle. One is the need for asset allocation, and the other is to be eliminated by the cryptocurrency circle in order to make the best of both worlds.

Along with the domestic crackdown on Bitcoin mining, foreign capital began to gradually enter the country to seek to purchase second-hand cheap mining machines. I have a friend who sold some of his mining machines at a 50% discount, and he couldn't stop it. This is the deterrent power of the policy. But then again, it's the same thing. Foreign countries are actively deploying mining, but China is cracking down on it. If the subsequent policies are so strict that they can be cut off at the right time, it will be equivalent to handing over the future financial accounting rights to the West. So there will be management, but it won't be too strict. Just like another friend of mine, who used to sell meat in Dongmen and was nicknamed "Pork Princess". Although she is missing now, I know she should still be doing well, after all, the price has risen again.

【Technical Analysis】

Back to the technical side, Bitcoin is currently hovering. Yesterday's rebound was mainly because the further policy news expected by the market did not arrive, so it rebounded temporarily to take a breath, otherwise there would be no place for shock. As it rebounded to the pressure zone of 40,000-43,000 US dollars, it is time to start hesitating again. After all, the policy has not been completely implemented, and everyone still needs to develop relatively slowly. According to the previous rules (policies in 2013 and 2017), the details of the subsequent relevant policies will be settled in 10-15 trading days. From this perspective, the market will not perform very well for the time being, and can only hover, making a living in a snail shell.

From another perspective, it is the time required by the technical pattern. For example, the monthly line has such a big fluctuation this month, you can't just pull back a line to make a positive line, that's too much, this month's monthly line only needs to close above 40,000 US dollars, it will be good, and the monthly line will not close for another 6 trading days, so there is only so much room, so it must be traded (see yesterday's article for details).

Currently, Bitcoin is in a triangular convergence pattern on the daily chart. This triangle can be divided into two possibilities. One is a triangular oscillation without direction tendency:

As shown in the above figure, this kind of triangle has no directional tendency and is the type that can rise or fall later. Li Ge generally likes to play this kind of game, which makes people confused about the direction. The oscillation space of this triangle is 32,000-40,000 US dollars. As time goes by, the high point will be lower and the low point will be higher after the triangle converges, forming a convergence pattern. The best time to choose is May 31st to June 1st.

Another type of triangle is an ascending triangle. The lower track of the ascending triangle remains unchanged, and the upper track is the previous important support point of 43,000 US dollars. Due to the break, the strong support will turn into strong pressure:

This triangle is a very obvious ascending triangle, with a range of 32,000 to 43,000 US dollars. As time goes by, the low point will move up, but the high point will not change. The extreme change time is June 10.

The market is currently between two triangles, and it has not yet been determined which triangle it is. Judging from the performance this morning, it is a white triangle, but as long as the pressure of 40,000 US dollars is broken, it will become a yellow triangle. While it is changing, just wait.

From experience, if the market is relatively strong, then this kind of low-level hovering generally needs to give a directional tendency in no more than 10 trading days (tendency is not the final answer). Starting from May 19, it will take another 4 trading days to determine whether it is relatively strong. If it is relatively slow, the definite answer to the rise and fall will be given from June 1 to 10. No matter which one it is, it is only suitable to wait at present.

Regarding the direction of the market, you can go back and take a good look at yesterday’s article. The answer is actually very clear. The process is a bit cumbersome, so just be patient.

There’s not much else to say for now, but that’s pretty much it.

That’s all for today. I wish you all the best. Forget it. Things are not going well for now. Follow the trend and keep pace with time. I am Pixiu K, and I will continue to be Pixiu. See you tomorrow.