Bitcoin (BTC) just closed the weekly candle below its 50 week moving average. This is a very bearish development considering BTC/USD is already heavily overbought on the weekly time frame. The weekly chart shows that the price is trading near the upper extremity of the Bollinger bands within a rising wedge. Soon as this rising wedge breaks to the downside, BTC/USD could see a massive decline that could pull it down to its 200 week moving average. There is no denying that we might see a sharp decline sooner or later and that BTC/USD has been long overdue for a major retracement. However, at the same time the retail bears seem to have become too confident, too soon. This gives the market makers and whales the upper hand to decide how long the price remains in this zone and how far it goes before the next decline.
This is the most ideal setup for whales that prey on both the retail bulls and bears. They could stage a short squeeze to put most bears out of their positions while at the same time luring bulls into the trap before the next fall. It is very rare to see both the bulls and the bears fighting this hard for a certain outcome. The bulls badly want to see the price above $6,000 while the bears want to see it below $1,800 like yesterday. The bulls have become careful with their positions after the recent pullback but the bears have become even more confident and are opening margined shorts at what could be considered the wrong time. This is because BTC/USD has yet to test the previous market structure around $5,800-$6,000 and a lot could go wrong as that happens.