Trading Bitcoin: Finally The Bear’s Crash Price

Finally The Bear’s Crash Price

On the 4 hour chart above, we can see that Bitcoin has dumped over 7% in one bearish engulfing candle. The sequential indicator activated a short trade when the previous red 2 candle closed below the previous red 1 candle. Bearish momentum followed and price quickly declined to $7.4k.

Daily

The daily chart above tells it all. Ever since the bulls were rejected by the 200MA (orange), the bears have taken control. Now they continue to drive price down as the moving averages become even more bearish. The 50MA (grey) is about to intersect the 200MA (orange). In classical technical analysis, this is known as a death cross and it is a severely bearish continuation pattern. Additionally, the Lucid SAR (blue x’s) continues to remain in a bearish position above price.

Weekly

On the weekly chart above, Bitcoin has dropped on a perfect red 9 candle. In order to become bullish, we need to see Bitcoin reach a green 1 or green 2 on the weekly chart. Also, we need the Lucid SAR (blue x) to shift into a bullish position below price. Until we get those metrics, there are few technical reasons to be bullish. While Bitcoin has fallen profoundly, there is still a strong support level with the moving averages at $6.7k. It may be likely that Bitcoin continues to decline to this price point. As of now, we have yet to see.

Conclusion

Last week we published an article titled, “$7.2k next week“. In this article, we describe the reasons which led to today’s decline. It ultimately comes as a result of confluence between multiple bearish indicators. While Bitcoin has experienced a profound decline today, we still may not be out of the woods yet. A further decline to test the $6.7k support level may occur before the end of the week.