Earlier this week, bitcoin enjoyed a strong and quick rally, spanning all the way from the low $3,100s to the upper $3,900s — in other words, a move that previously took the market weeks to make, this time took place in just a few short days. And now, at the time of this article, it’s currently seeing a rejection shortly after running through several layers of overhanging resistance. Figure 1: BTC-USD, 4-Hour Candles, Fibonacci RetracementsAlthough the market rallied 25% in just a few days, if we zoom out to higher time frames, we don’t exactly see strong signs of bullish presence in the market:Figure 2: BTC-USD, Daily Candles, Gravestone DojiRight now, seated atop the current rally lies a “Gravestone Doji.” A Gravestone Doji is a reversal setup that represents a lot of intraday volatility that yields very little progress on the daily candles. You can see the very narrow body representing little progress between the open and close of the trading session, and a long wick that represents the intraday volatility. It should be noted that this is just a setup — it isn’t even a valid setup until the market closes the daily candle. Which, again, is still open. Looking back at the intraday chart, we can see we managed to break upward from a bullish reversal pattern called a “Falling Wedge”:Figure 3: BTC-USD, 4-Hour Candle, Falling WedgeUnfortunately, however, we hit the typical price target for the Falling Wedg...
