Trading Bitcoin: Price Back Below $8k

Price Back Below $8k

Finally, the price of Bitcoin falls from $8.3k. For the past week, Bitcoin has been fluctuating in the no trade zone from $8k-$8.5k. Three hours ago, Bitcoin crashed below $8k and is now trading at roughly $7.9k. On the daily chart above, the sequential indicator is on a red 4 of 9. In sequential theory, a red 2 closing below the previous red 1 is an indication to place a short trade. The red 2 from Monday did not close below the previous red 1, but yesterday’s red 3 closed below the red 1 which activated a short trade based on sequential. Therefore, if you are trading based strictly on sequential you would be sitting in a profitable short trade with more downside potential incoming. If you decided to place this trade, you can set a stop loss at the start of the red 1 candle.

Additionally, the Lucid SAR (blue x) has shifted into a bearish position above price. The Lucid SAR will now act as resistance as bearish momentum continues. Also, Bitcoin is still trading below the 200MA (orange) which has acted as bearish resistance for the past two weeks. Furthermore, the moving averages are about to make a death cross on the daily chart which is a severely bearish indicator.

Since there is bearish confluence between sequential theory, the Lucid SAR, and the moving averages, price action is calling for a significant decline. You may or may not want to enter a short trade at this point depending on your risk tolerance. Above all, it’s probably not wise to be long with our current metrics.

4 Hour

The 4 hour chart above is currently on a red 8 of 9 candle. In the next 4 hours, price will likely give us a 9 which may lead to a large move. Notably, price is trading below all three moving averages.

Conclusion

Bitcoin has been in a no trade zone from $8k-$8.5k for the past two weeks. Today, Bitcoin has dropped below the $8k support level and is in danger of falling to lower levels. Many indicators are leaning bearish as price action continues. Watch for a confirmation of a breakdown. Sometimes price action can present false breakouts or breakdowns, so be careful when evaluating a potential breakdown.

Disclaimer: This article is not financial advice. I am not a financial advisor. The author of the article hodls Bitcoin.