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 BreakoutThis 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.This rejection should not be underestimated as it represents a failed consolidation. Patterns that break out and see 100% retracements to the breakout point often are signs of a potentially strong market reversal. In our case, it would be a reversal of our local uptrend.This rally represents a third failure to break our bearish market structure and likely means we will be visiting the low $3,000s to test support/demand once again. Sitting just below our current market low is a strong, macro support level that could see a test if the demand is weak:Figure 2: BTC-USD, Weekly Candles, Macro Support LevelA test of the zone between $2,900 and $3,100 almost seems inevitable, given the amount of failed rallies and ...
