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% 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.
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
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% 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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.