Halloween is that period of the year when streets are full of ghosts and monsters. At a closer look, they are just kids asking for candies. If you look closely at the latest “spooky” Bitcoin’s dip, you will find many bullish elements as well.

As anticipated, the market was looking for a retest of the first support area . During a retest, the magnitude of the price move does matter! This week Bitcoin dipped below the psychological level of $60,000 just to find another support right above the previous consolidation area.

The price then rebounded back above the breakout level. This kind of price action implies a solid amount of buyer and demand. On the other hand, sellers may not have been satisfied by such a meagre drop from all-time high. Should they manage to push the price to a new lower low, that would open to a more severe drawdown that will allow them to buy back at more convenient prices. The fight is on, and it could lead to a period of sideways moves between $57,000 and $64,000.

What about Alts? They will undoubtedly be those that will benefit the most from this scenario. The rally of Altcoins in BTC prices started precisely at the top of the latest Bitcoin’s run. As the trend began to weaken, investors and traders rotated back their allocation in Alts.

How long will this Alt-party last? Time will tell. Meanwhile, it’s worth continuing to keep an eye on the Bitcoin Dominance chart compared to Bitcoin’s price. This is the single best indicator to optimise your portfolio allocation and boost your returns in times of lower volatility .

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Technical analysis is a handy tool for traders, but the truth is that it’s not an exact science.

If it were, reading a book would make you a professional trader. Chart patterns may appear different to the eyes of each analyst based on their biases. The first step is to try setting aside as much as possible any belief you can have about where the price is heading next and focus as much as possible on objective elements. This is necessary to use Technical analysis appropriately,

Let’s try to apply this method to Bitcoin’s chart. As time passes, the chart seems to be more likely on the verge of another significant drop. Since June, the price has posted lower highs, while the horizontal support is holding. The question is, for how long? Some traders have raised the idea that Bitcoin is building a massive head-and-shoulders pattern.

For how bearishBitcoin may look like, the good news is that this is not an H&S formation. The “head” is atypical, but what is even less common is how the volume develops. To be a valid H&S , the volume should be higher on the left shoulder and decreasing after that. Conversely, Bitcoin’s volume has been higher on the right shoulder, indicating high interest both for buyers and sellers around those levels. Another good news is that Bitcoin broke up from a similar accumulation period at the beginning of the year.

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Once a trader from a large forex trading desk explained his main trading daily routine.

He started his day placing a large order to test the closest price resistance, waiting for the market to react. If the market moved in the direction of his trade, he was happy with a nice profit. On the other hand, if the resistance proved to be solid, he would have closed the previous trade with a small loss and opened a new one of double the size in the other direction. Eventually, the profit could have been even larger.

No matter what asset class you are trading, the basic principles of demand and supply are always the leading indicators to understand where the trend is heading next.

Looking at Bitcoin’s chart, this applies perfectly. The price has been moving with relatively low volatility for over one week now. The moves may seem random, but they make a lot of sense at a closer look. The price tends to consolidate into tight ranges, which are tested frequently. Once a breakout occurs and fails, that is the signal that it will likely move in the opposite direction.

Once you break out the price action into blocks, it becomes easier to understand how supply and demand are distributing.

Remember, the price eventually chases liquidity, so take your position in the direction of the liquidity areas, and plan your risk management accordingly.

Trading such choppy market conditions may be stressful and frustrating. The good news is that automated trading may add more value to your portfolio, especially in these times.

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