After breaking down and out of the triangle pattern, Bitcoin made a low around $31,000 and is now bouncing higher. This bounce is very important for two reasons. This is a back test of the break down area. Price broke out of the triangle pattern once it fell below $35,000. This was once support but now resistance. This back test will confirm or cancel the bearish signal that was give with the triangle breakdown.
Blue rectangle- resistance, previous support
Black line -trend line resistance
Bitcoin is below the triangle pattern, below the key resistance of $38,000-$39,000 and below the black downward sloping resistance trend line. Trend remains bearish despite the current bounce. However this bounce could unfold into a false break down if price breaks above $38,000-$39,000. If the downward move to $31,000 was a trap, we will see resistance at $39,000 break and price push towards $45,000-$50,000. If price gets rejected around $35,000, I expect price to fall towards $23,000-$15,000.
