Chart Of The Day: Bitcoin Plunge Signals Bears Have Again Overwhelmed Bulls
Investing.com | Aug 29, 2019 23:54
Bitcoin, which in late June briefly jumped past $13,000 to gain 236% during 2019 up to that point, has since been reversing course. As of yesterday that slide appears to have accelerated.
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The most popular cryptocurrency by market cap slumped more than $600 in 30 minutes, falling back below $10,000 on Wednesday. Today it's down 2.8%, or -$270.6, heading lower for the third day, trimming a total of 8.85%, or $920, so far this week.
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Nevertheless, even after a $3,290 or 25.5% drop since its high, Bitcoin is still up $,5606 or 146.35% for the year.
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There's little clarity on why the cryptocurrency started moving higher, though some credited Facebook's (NASDAQ:FB) Libra project, while others point to a rush to get in before halving , where the number of coin rewards generated will be divided by two.
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The fundamentals behind Bitcoin's current plunge are equally murky. But the technicals are clear: the downside breakout of a pattern that—should the price close lower—suggests sellers have overwhelmed demand and are starting to lower their offers in order to find new buyers.
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The price has fallen below the bottom of a symmetrical triangle. This pattern’s converging trendlines demonstrate an impasse between buyers and sellers. The downside breakout demonstrates that the stalemate has been resolved in favor of the bears.
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If prices lock in below the triangle, it would be a signal that the market has synced into a coherent downtrend. Adding emphasis to this scenario: the downside breakout coincided with that of the uptrend line since late March.
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The next break would be the support line between the May 30 high and the July 17 low, at $9,100. However, even then, the peak-trough succession would still be up.
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Conservative traders would short after a descending peak and trough series or go long after a high above the June 26, $13,764 peak to extend the uptrend.
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Moderate traders may short after the price closes below the $9,100 presumed support line.
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Aggressive traders may short after a close below the triangle.
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