Trading Bitcoin: Will the Bears Take us to $8k?

Will the Bears Take us to $8k?

Bitcoin continues its bearish consolidation, as price is now trading at $8.6k. On the daily chart above, you can see Bitcoin priced with Heikin-Ashi candles. These candles are calling for further near-term bearish price action as the downtrend continues.

Daily Sequential

Bitcoin is now on a red 2 candle. In sequential theory, a red 2 closing below the previous red 1 candle is an indication to place a short trade. However, the bulls are still holding support at the 50MA (grey). Additionally, the Lucid SAR is still acting as bullish support while trading below price. If the Lucid SAR flips to a bearish resistance level above price, there is an even higher likelihood price will fall below the 50MA (grey).

4 Hour

The 4 hour chart is even more bearish than the daily. On the 4 hour chart above, the sequential indicator has reached a red 4 of 9 candle. Additionally, a short trade was activated when the red 2 closed below the previous red 1 candle. This is significant because price has just fallen below the 200MA (orange). Another bearish indicator is the Lucid SAR which is trading above price, which provides greater confluence between indicators to create a bearish outlook.

Conclusion

The sequential indicator is signaling short trades on both the 4 hour and daily chart. The bulls must hold the 50MA (grey) on the daily or else price will likely fall to test the $8k support level. In order for the bulls to gain momentum of the trend they must break above the 200MA (orange) resistance level. For now, the trend remains bearish.

Disclaimer: The author of the article hodls Bitcoin.