Trading Bitcoin: Bear Flag or Bounce to $8.2k?

Trading Bitcoin: Bear Flag or Bounce to $8.2k?

Trading Bitcoin: After a drop from $8.7k, Bitcoin is now hovering around the $7.7k – $7.6k price channel. When everyone was bullish at $8.7k, $7.6k seemed like an optimal time to buy the dip. However, technical analysis is telling us that price has a high likelihood of dropping lower before a dip-buying opportunity presents itself. On the daily chart above, Bitcoin’s sequential indicator is on a red 4 of 9 candle showing more downside throughout the rest of the week.

4 Hour (w Moving Averages)

The 4 hour chart above shows that Bitcoin is on a red 1 and is holding in neutral territory. The 200 MA (orange) has been a critical level of support throughout the May uptrend. If price falls below this level look for a larger pullback into the $6.4k region. Also, bearish traders are seeing a bear flag forming with a target of roughly $6.5k.

4 Hour Parallel Price Channel

On a macro level, Bitcoin’s sequential indicator, as of now, is giving us bearish targets for the next four weeks. Looking at the chart above, Bitcoin’s recent price action has put us into a potential downward price channel. However, even within this channel price has the possibility to bounce to the $8.2k level before a probable rejection.

Weekly

Bitcoin has experienced a ruthless weekly candle which has taken us into lower levels. Currently, we are on a weekly 9. After a drastic price increase to reach a green 9, the sequential indicator will typically provide you with a 1 to 4 candle correction before going higher. Therefore, sequential is telling us that there is likely four more weeks of downward price action before a bull market can be resumed. For the next four weeks, we’ve highlighted three different price targets all mentioned in yesterday’s article.

Cryptocurrency News

As bullish momentum evaporates, volumes are less than half of what they were during the mid-May surge. Additionally, Bitcoin’s blockchain has cooled down and transactions are back under 4 seconds.

Chart Source: Mati Greenspan, Senior Market Analyst at eToro

Conclusion

Support at $7.9k – 8.3k will now act as resistance. If price attempts to bounce from $7.6k we expect a harsh rejection at $8.3k. Bulls are having a difficult time creating any upward momentum. Bitcoin is forming a possible bear flag which would take us to a target price of roughly $6.5k. For now, support is still holding at $7.6k.

 Disclaimer: The author of the article owns Bitcoin.