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BTC: Alternative Bearish Case DOES Exist! - DOJI Tutorial

Here, we would like to discuss the bearish scenario. My job is to make sure that everyone has an understanding of both sides of the spectrum when looking at the market. In this analysis, we will be looking at the higher 1D timeframe, as it is now showing strong resistance - we have now reached a key milestone resistance at $16,000. This is now the make or break moment for bulls to break this key area. This won't come with ease - that is why I mentioned it is important to be level minded when the market is euphoric. As a disclaimer, this is merely a pattern and not indicating price targets. This is purely an educational post.

We are also seeing an "EXTREME GREED" on the crypto fear and greed index, which may indicate a strong sell signal for many bears. Remember, this index never existed prior to the 2018 crash. The more the market has access to these types of information, the smarter the market becomes. This is why an instant ride to 20K may not come as quickly as we may think. It's important to be a contrarian here!

Technicals:

The long legged doji pattern is an extremely classic pattern that can be traded wisely if done correctly. We can see the pattern form when the wick on both ends of the body is large - this is indicative of two equally strong forces but in opposition to each other. It thus reflects indecision - that is it. When a long legged doji forms during strong downtrends or uptrends, it means that there is a move towards equilibrium between supply and demand . In such a scenario, there are strong indications of the trend reversing. For instance, when the long legged doji candle appears during a bullish trend , there might be a reversal. The buying pressure grows stronger initially but soon, there is fear of a reversal of trend, and traders start selling positions, which leads to a drop in price. There sia tug of war between two pressures, ie, buying and selling, and eventually the closing price gets pushed back to the level of the opening price.

For my bullish post, please check out the short term BULLISH analysis!