Bitcoin Price Analysis: Cryptos Sell Off On Fear Of Heights

  • Bitcoin closed drawing a long-legged Doji candle, a trend-swing pattern
  • CME and NASDAQ expected to get in the market, still lots to play

Bitcoin closed yesterday’s European session hinting some potential for a technical sell-off, and so it happened. All the alarms were triggered after an evening star appeared in the BTC/USD 1H chart. A first bearish run saw the Bitcoin price falling to $10560, which was followed by an aggressive pullback that returned the price to levels close to the recent all-time highs. That was a textbook bull trap that left lots of buyers lost in the top of the wave.

Yesterday’s price action was really volatile throughout the day in the main Cryptocurrency, with price breaking out and experiencing swings larger than 30 percent of the opening price. After the sell-off, Bitcoin tried to recover $10000 but it failed doing so. That was a crucial level to get before the daily close, and by not getting it, doubts are mounting about another potential bullish ride in the coming days.

BTC/USD 1H Chart

In the daily chart, Bitcoin price has drawn a long-legged Doji candle, a trend-swing pattern. Bitcoin price will keep the bearish pressure until it unsettles this candlestick pattern with a daily close above $11442.


Despite that bearish overnight move, indicators continue to show bullish potential, with MACD open to new uplegs. In the Directional Movement Index (DMI), D+ is still moving above ADX with ease, while D- is not showing any kind of selling interest.

The contradiction between candlestick price action and indicators might require some time to clear out. In the very short-term, indicators are in rather neutral positions, which might be indicating a BTC/USD consolidation period after insane volatility experienced yesterday.

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In the short-term, the Bitcoin 4H chart buyers still are overmatching sellers. MACD is crossed down low and with some room to slide down to neutral levels, which hints some bearish potential. While the daily technical formation doesn’t disappear, the most probable scenario is a bearish continuation move.

BTC/USD Daily

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Conclusion

Resistance levels to watch in the upside are the all-time highs that were set yesterday. Only by breaking above $11142 will the bearish structure be dismantled. In the downside, the most meaningful support will be yesterday’s lows at $9135, which match the 23.6 percent Fibonacci retracement on the uptrend started last July. If that support is broken, there are not many safe spots in a bearish run until the $7800-$8100 zone.

Today, NASDAQ has shown interest in the developing a derivative product linked to Bitcoin, as CME will be launching in the coming days. Moreover, Goldman Sachs has included the main Cryptocurrency in its Commodities list. All these market giants are now conceding that Bitcoin has a long and eventful life to live.

Bitcoin is dead? Long live the Bitcoin.

The preceding article is from one of our external contributors.
It does not represent the opinion of Benzinga and has not been edited.

Posted-In: Bitcoin cryptocurrency FXStreetForex Markets

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