Gu Jingci: The May 21 Bitcoin/Ethereum rebound isn’t a reversal—just a continuation of the drop

Since Bitcoin/Ethereum fell from the highs, it has rebounded somewhat. In particular, Bitcoin’s overall trend is still relatively strong. It has once again come close to the 78,000 level. Overall, it looks strong, but there is still a lot of room on the downside. On the 4-hour chart, the latest candlestick is a small-bodied doji, showing fierce competition between bulls and bears, and that the market is consolidating. On the daily chart, the candlesticks for the most recent two days are both bullish, indicating signs that prices may have stabilized and are recovering in the short term. However, overall, it is still a rebound within a downtrend.

On the weekly chart, there were several prior bullish candles, but last week just printed a large bearish candle. What’s happening now—sideways consolidation along with the rebound—is only a continuation of the downtrend. In terms of technical indicators, the DIF line has crossed above the DEA line to form a golden cross, and the MACD histogram remains positive and is expanding, indicating short-term momentum is shifting from bearish to bullish. However, the DIF and DEA are still operating below the zero axis, so the overall trend is still bearish. Also, compared with the extremely high volume during the earlier sell-off, the trading volume during this recent rebound has decreased. This suggests the rebound strength may be limited, so be alert for further selling pressure afterward.

For execution, keep holding the short positions by raising the entry, or continue to go short around the current price near 78,000 and around 2145. Short-term targets are near 75,500 to 76,500 and around 2060 to 2090. The “big cake” grandson has been moved up to 78,800, while the “ether” grandson remains unchanged at 2180.

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