Bitcoin may be preparing to take a further nosedive as price action and technical indicators find confluence on the bearish side. Fortune may still favor the bears as $BTC drops below $40k on the day.
Things may be looking bearish for the benchmark digital asset, Bitcoin, after drawing red today. What may look like a test of the support line of a downward-oriented trend channel may see the crypto asset drop to further lows.
Opening today’s trading session at the $43,298 price level, $BTC’s daily price action sautéd quite the stop-loss, plummeting to a price of $38,214 before making a slight recovery. The price of the asset – at the time of writing – is $39,024, a 12,14℅ fall from a high of $43,906.
Looking at the candles, one can put together a foreboding picture of things to come. today’s bearish belt-hold candle completes a bearish-three-methods pattern, which tells us that the bleed isn’t quite over yet, and we may still see $BTC revisiting previous lows.
Following a failed test of the $43,593 resistance level in preceding days, Bitcoin sustained a severe thumping today, seeing its price break below the $41,800, as well as the $40,600 support levels. This is, if one’s wave count is correct, only the fourth wave of a bearish channel, so we may, likely, see a good amount of downward pressure before market conditions begin to, again, favor the bulls.
The Ichimoku Cloud technical indicator also seems to tell a similar story, as price action – at present – is traveling beneath Kumo. All Moving Averages also confirm our suspicion that markets may still be in for some red.
The Tenkan line is below Kijun, and both are currently facing downwards, while Senkou Span A and B are similarly inverted, and pointed towards the ground. The Ichimoku’s long-term Span also bards harrowing market conditions, as it is presently positioned below price action, and minor Moving Averages.
The day isn’t over yet, and things may still recover, however, as they currently stand, we may see prices break below the channel and – perhaps – sink to the $37K, $35K, or (if bulls fail to wrestle the markets back from the bears) even the $31k price level. The possibility of prices tumbling lower than $29k, though bullish sensibilities view it as an unlikely event, cannot – at this point – be ruled out.
The Stochastic RSI has just seen a bearish crossover just below the 100 line, which gives us an indication that things may still get ugly. The MACD’s histogram recently turned negative, and bars have gotten steeper than the previous positive position. The Moving Averages have also assumed a bearish position, with the fast line diverging, quite markedly from the slow line. Ladies and gentlemen, we have confluence..though things are never absolute.
