Last analysis I said it was likely we'd see a bounce up to the top of this channel. With prices trading around .216 Bts, a move up to nearly .3 bts is a pretty significant move up.
Exactly that played out
We saw exactly that playing out, a perfect bounce to the top of the top of the channel, rejection off of it, classic T.A. Leading up to that analysis I have been incredibly bearish, and rightfully so. We have seen prices continue to slide lower and lower without any willingness to buy from the bulls. It has been ugly to say the least.
I believe we are looking for a bottom
They say it's always darkest before the dawn. I'm not sure how true that statement actually is, but it sounds good, and really works as a metaphor. Usually when your emotions and psychology is feeling the worst about something, that's likely time to buy. So I am thinking we are looking for a bottom here. The price of smoke has been just absolutely decimated, and there is just not much of a reason for anyone to continue selling down here and take pennies on the dollar. I don't think that necessarily means price is going to start to rocket off, but it could.
The immediate buy side of the books is fattening up. This however is deceptive. What we are seeing is that the lower part got completely taken out, taking away that smooth gradual increased look to it. The amount of orders is still roughly the same. So sellers aren't going to be able to sell without slipping price heavily still. Because of that, I would expect that a final capitulation is very possible before we sideways trade a bit into some future take off.
Monkey see monkey do
The way markets work is people follow the leader. People are selling, so people are selling, so people are selling, so people are selling (if you see where I'm going with this). Eventually, someone will buy, and that causes others to buy, because buying removes sell side liquidity, and as that goes away, people fomo into taking more. That is the general ebb and flow of any market.