Bitcoin is likely to recover in the short term to offer longer term selling opportunities, with the negative head and shoulders pattern complete. We look for a test of first resistance at 4000/4040 and should struggle initially. Eventually we could continue higher to very important resistance at 4200/4300. A high for the day recovery is expected here. Try shorts with stops above 4500.
Longer term outlook is now negative but we have held important support at 3840/3780 so we are expecting a short term bounce. However a break below the 3 week low at 3650/3600 shows bears gaining more control and should trigger more stops sending prices towards 3500/3480 and 3410/00. Eventually we are likely to revisit 3340 and 3230/10, perhaps as far as strong support at 3150/30 for a buying opportunity.
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