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The recent trends in the Bitcoin market have attracted the attention of many investors. Let's take a deep dive into the current market conditions and the possible directions for development.
The recent decline is not accidental; it contains significant signals that could change the market direction. Prior to this, Bitcoin attempted to break through its historical high, but the buying pressure was insufficient to sustain the upward trend. Meanwhile, selling pressure remains, which is an early warning signal that investors should be cautious of.
From a technical perspective, a divergence has appeared on the 4-hour chart, indicating that buying momentum is weakening. In this case, we need to be more cautious in viewing market trends.
So, how can we determine whether the upcoming rebound is a trap? The key lies in observing the nature of the decline. This decline exhibits strong momentum and is not a typical correction. At the same time, the trading volume has significantly increased during the decline, indicating that there may be deeper market changes behind it.
If a rebound occurs next, we need to follow two possible scenarios:
1. If there is a strong increase followed by a normal correction, it may indicate a shift in market trend, and the short-term chart may show a bullish pattern.
2. However, if the rebound is weak and only a slight rebound after a significant decline, and the market frequently encounters resistance to upward movements, especially when it reaches the overbought zone on the one-hour chart and is suppressed, then we need to remain highly vigilant, as this may indicate that the weak market trend has not yet ended.
In such a complex market environment, investors need to maintain a clear mind, closely follow various market signals, and make cautious decisions to avoid falling into potential investment traps. At the same time, it's important to remember that the market is ever-changing and to be ready to respond to new changes.