Trading Bitcoin: Broke Support at $10k, Now What?

Broke Support at $10k, Now What?

Bitcoin broke support at $10k this morning as bearish consolidation continues. On the daily chart above, the sequential indicator is on a red 2. If our current red 2 candle closes below yesterday’s red 1 candle, then a short trade is in play. Additionally, price has broke below the 50MA (grey) which has been a primary support level throughout all of Bitcoin’s spring rally. While Bitcoin has fallen below the 50MA, it still has the setup trend line and the 0.382 fibonacci level as support at $9.5k.

4 Hour

Bitcoin has now fallen below all three moving averages on the 4 hour chart above. The sequential indicator is on a red 7 of 9 candle. In 8 hours the sequential indicator may reach a red 9, in which case we would reevaluate the trend across all time frames. For now, the Bitcoin’s trend is leaning neutral-bearish.

Weekly

The weekly chart has given us a red 2 of 9 candle. Therefore, bearish momentum is implied throughout the next few weeks. However, sequential theory tells you to wait until confirmation. Furthermore, our current red 2 candle must close below the previous week’s red 1 candle for a short trade confirmation. For this situation to occur, price would have to close below last week’s low of roughly $9k. If price closes below $9k on the weekly chart, then a short trade is in play based on a weekly timeframe. Until then, Bitcoin’s weekly chart is neutral.

Gold

Gold is currently on a weekly sell 9. If you are long gold you probably want to get out of your trade this week. It will be interesting to see whether gold continues to rally or pulls back as the sequential indictor would suggest.

Conclusion

Bitcoin broke support at $10k and is now leaning neutral-bearish. If Bitcoin closes below $9k this week, the bulls could be in serious trouble. For price to be bullish Bitcoin must break above its previous lower high at $10.8k. If the daily chart gives us a red 2 closing below yesterday’s red 1, then a short trade is in play.