Trading Bitcoin: Bears Continue to Dominate

Bears Continue to Dominate

The bears continue to dominate as price returns to the $9.3k price region. In yesterday’s article, we described Tuesday’s price increase as nothing more than a reaction rally following the weekend’s severe decline. On the daily chart above, Bitcoin is on a red 8 of 9 candle. Price should be bearish throughout the rest of the day. If we reach a red 9 tomorrow price will likely make a large move in one direction. While price has the ability to reverse on a daily 9, in this case Bitcoin will likely decline to the $8.5k region based on previous bearish momentum. For instance, Bitcoin’s sequential indicator is on its first red 9 sequence. Therefore, tomorrow price will likely start into a new red 1 count. Additionally, it will be difficult for the bulls to break above resistance with the setup trend line and 50MA acting as resistance at $9.5k.

4 Hour

Bitcoin’s sequential indicator has just undergone a price flip to a red 1 on the 4 hour chart above. With our latest rejection at $9.8k, Bitcoin has made another lower high which only adds bearish momentum to the structure of the trend.

Cryptocurrency News

Yesterday was a big day for the cryptocurrency community as Facebook Executive, David Marcus, was grilled in front of Congress over Facebook’s cryptocurrency project Libra. Overall, Congress still has a lot to learn about blockchain technology, decentralization, and the technicalities of various cryptocurrencies. Ultimately, the US Government isn’t afraid of Facebook or Bitcoin, they are threatened by a lack of control.

Conclusion

Until Bitcoin can break above its previous lower high at $10k, the structure of the trend remains bearish. Tomorrow Bitcoin will likely reach a red 9 on the daily chart, this will likely lead to a large move in one direction, therefore it will be a critical time to evaluate the momentum of the trend.