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Bitcoin: bullish engulfing. All hope for Elon Musk

The BTC/USD daily candlestick broke through the support at 31,082.82, marked with a red dotted line, then closed bearish on Tuesday. Today, a bullish engulfing reversal pattern and rally above the level is observed, signaling that the breakout was false.

Yes, today's candle is also not closed yet. And anything can happen by the end of the day. Therefore, the conclusions are indicative. Nevertheless, now it looks like the fourth false breakout of the 31,082.82 mark, confirms its strength. In addition, support at 28,392.99 is still relevant, as is the likelihood of a bullish scenario.

Traders should remember that long-term forecasts are good for guiding and forming hypotheses. But you need to trade what you see, not what you know. And we see an unfinished false breakout, uncertainty remains, but plans for positions can be sketched. In addition, the idea of an upward reversal from the level of 31,082.82 has been hatching for a long time.

Meanwhile, the opinions of influencers continue to differ on the web. Interestingly, the B Word conference is taking place today, in which Elon Musk, Jack Dorsey, and Cathie Wood are taking part. Bitcoin supporters Dorsey and Wood may well provide Musk with strong arguments in favor of the main cryptocurrency. Or maybe he will even change his mind and write something that will support the current jump.

The assumption is interesting, but similar situations of coincidence of the technical pattern and the rhetoric of Elon Musk on the bitcoin chart have already been, however, on the way to the historical maximum.

The idea of the crypto community that today's B Word conference can help the market may not be groundless. Both Jack Dorsey, CEO of Square, and Cathie Wood, CEO of ARK Invest, will have a lot of new data that they can provide Elon Musk regarding greener criteria in favor of bitcoin. If persuaded, Musk will undoubtedly make some kind of positive statement that could bring many investors back to the main cryptocurrency.

Apart from China, the main issue to be addressed is the environmental impact of bitcoin mining. According to the recently formed Bitcoin Mining Council, the energy consumption of mining is now "negligible".

Now let's look at the opposite point of view and the arguments for a bearish scenario. After all, the market is not moved alone by Musk, the price depends more on the positions of big players.

According to Bybt BTC Options Open Interest By Strike Price, more and more investors who are opening positions in bitcoin put options for $20,000 and $22,000. The aggregate open interest at these prices is almost 10,000 BTC. Much of the interest came after the recent fall in the price of bitcoin below the $30,000 mark.

What does this mean? Most likely, it confirms the fact that supporters of the bearish scenario are ready for a fall in prices. But, options are derivatives that give a right that does not have to be exercised. It is more of an insurance, a way to hedge open positions. In addition, it became known that at the beginning of the week, the whales purchased bitcoins for $1.7 billion.

However, no matter what happens behind the scenes of the market, in such uncertainty it is worth remembering what Grandpa Dow bequeathed to us: the price includes everything. Therefore, when opening a deal, it is worth acting based on what we see, and not what we know. Having combined these rules, we continue to observe the clarification of the situation. With the current technical picture, the recovery scenario has not yet lost its relevance. But we don't discount the bearish one either. We wait.

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The material has been provided by InstaForex Company - www.instaforex.com