Bitcoin Dropped Despite Positive Non-Farm Payroll Data? The Plunging Dragon Strategy Reveals the Short-Term TrendLast night's Non-Farm Payroll data came in below expectations, indicating a less-than-stellar US economy. This increases the likelihood of a rate cut, which is generally positive for the financial markets
Bitcoin Dropped Despite Positive Non-Farm Payroll Data? The Plunging Dragon Strategy Reveals the Short-Term Trend
Last night's Non-Farm Payroll data came in below expectations, indicating a less-than-stellar US economy. This increases the likelihood of a rate cut, which is generally positive for the financial markets. So why did the market not rise but instead fall? This warrants serious consideration.
I've noticed a curious phenomenon over the past two days. Previously, when Bitcoin dipped by 3-5 points, other cryptocurrencies would fall by at least 10 points. But in recent days, the decline in other cryptocurrencies has become less pronounced during Bitcoin's pullback. Furthermore, following the release of the Non-Farm Payroll data last night, the market initially surged, triggering stop-loss orders for short positions, only to plummet afterward, triggering stop-loss orders for long positions. This suggests that the months-long consolidation and correction phase may be coming to an end. The main players have achieved their objective, and few dare to bottom-fish. Most are choosing to wait and see or short the market.
Today, let's use the Plunging Dragon Strategy to analyze the short-term four-hour Bitcoin chart and see if it's heading up or down.
1. A massive bearish candle appeared on the Bitcoin four-hour chart at 8 PM last night, followed by a shrinking volume and an inertial decline, indicating weakening bearish momentum.
This massive bearish candle signals that bearish forces were initially strong, but the subsequent shrinking volume and inertial decline suggest that these forces are waning, and bears are no longer capable of driving the price down.
2. The candle at 4 AM formed a hammer pattern, indicating support at the bottom and a halt to the decline, leading to consolidation.
The hammer pattern is a bullish indicator, showing that the bulls are fighting back and successfully preventing further decline, putting the market into a consolidation phase.
3. After the price stopped falling, while the bulls haven't seen continued volume, the candle at 8 AM this morning retraced with shrinking volume, further confirmation of weakening bearish power.
The lack of continued volume from the bulls indicates that their strength is still limited. However, the shrinking volume during the retracement signifies that the bears are significantly weaker and unable to exert a meaningful impact on the market.
4. The last four-hour candle closed as a small green candle, but without volume.
The small green candle suggests that bullish forces are gradually strengthening, but the lack of volume indicates that they are still relatively weak, and the market requires further observation.
5. The current price action is characterized by consolidation after the price stopped falling, with waning bearish forces and no increase in bullish strength.
Based on this analysis, we can conclude that Bitcoin will likely continue to consolidate in the short term. However, the probability of further decline is low.
Based on these clues, we can predict that Bitcoin has stopped falling in the short term, but no signs of bullish strength have emerged. Short-term consolidation is likely to continue, with a low probability of further decline. The price level of 54,000 is close to the miner's shutdown price. Miners won't allow the price to hover near their cost level for long, so consolidation is expected to be brief before an uptrend emerges.
The miner's shutdown price is a crucial reference point for price support. Falling below this price would lead to miners shutting down their operations, reducing Bitcoin supply and ultimately driving up the price.
This analysis represents my personal opinion and should not be considered investment advice. If you find this article helpful, please consider following me!
In conclusion, Bitcoin is currently in a consolidation phase after stopping its decline. Bearish forces are weakening, and bullish forces are gradually strengthening. Bitcoin may continue to consolidate in the short term, but further decline is unlikely. An uptrend is expected in the future.
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