Trading Bitcoin: $8.5k Purged, Sub $8k Incoming?

$8.5k Purged, Sub $8k Incoming?

On the daily chart above, Bitcoin has now broke below the 50MA (grey) and is trading on a sequential red 3. This is very significant because we’ve broken below a key support level and the Lucid SAR (blue x) has flipped into a bearish resistance position above price. We’ll have to see if our current red 3 candle closes below the 50MA. There may be a possibility of a false breakdown, but under our current market circumstances, it seems unlikely.

Daily Heikin-Ashi

The daily heikin-ashi candles are still in a red downtrend. The bulls need to get a green reversal candle before momentum of the trend can truly shift.

4 Hour

We have flush broken the 200MA (orange) on the 4 hour chart above. Additionally, the bulls tried to retest resistance on the red 9, however they were promptly rejected by the Lucid SAR which is acting in a bearish position above price.

The Bullish Perspective

While the majority of indicators we’ve examined have been bearish, some traders, such as crypto birb, have identified a falling wedge pattern. Traditionally falling wedges are bullish patterns while rising wedges are bearish patterns. Above all, a pattern means nothing until confirmation.

Conclusion

The bears have momentum and the 50MA on the daily has been purged. The bulls need a ‘v’ shaped recovery from the current falling wedge pattern.