Cryptocurrency
Trading Bitcoin: Last Line of Defense for the Bulls
Last Line of Defense for the Bulls On the daily chart above, Bitcoin has reached a red 6 in the sequential count. Therefore, bearish momentum is likely to continue before we reach a red 9 in three days. As of now, Bitcoin continues to travel in a downward channel between the 50MA (grey) and the […]
Last Line of Defense for the Bulls
On the daily chart above, Bitcoin has reached a red 6 in the sequential count. Therefore, bearish momentum is likely to continue before we reach a red 9 in three days. As of now, Bitcoin continues to travel in a downward channel between the 50MA (grey) and the 128MA (green). Bearish momentum is likely to continue in the interim, however, the last line of support for the bulls is the 50MA (grey). If the bulls cannot hold this support level, Bitcoin may fall below the previous setup trend line to create lower lows. This would extrapolate price into the $6k – $7k region.
Weekly Heikin-Ashi
On the weekly chart above, the sequential indicator is on a green 3. However, Bitcoin created its first red heikin ashi candle on the weekly in the past month. This is noteworthy because it could be the indication of a bearish trend change. If a severe decline should occur, the most optimal support level would be the 128MA (green) and 50MA (grey) at the $7.2k price region.
BitMEX Funding and Premium Index
Above is a chart of the BitMEX Funding and Premium Index which has been a reliable counter-indicator for Bitcoin and the cryptocurrency market. As you can see above, the BitMEX Index has flipped into positive territory, therefore, the index is calling for bearish price action to continue.
BTCUSD Bitfinex Shorts
Bitcoin shorts have reached their lowest level since July. Therefore, there is not enough selling power for a short squeeze to power the market higher. Despite recent price action, the bears have yet to stack up on their shorts.
Crypto Fear and Greed Index
The crypto fear and greed index has reached 39. This is the lowest level since late October. Furthermore, crypto sentiment remains bearish as price continues to decrease. Many retail traders who bought Bitcoin at $11k during the 2019 spring run up may panic sell if price falls below $7k.
Conclusion
The 50MA (grey) is the last line of support for the bulls. If price falls below this level, a further decline to the $7k price channel is likely. For now, the bears have the momentum unless the bulls can break above the $9k resistance level.
Disclaimer: The author of the article hodls Bitcoin.