Bitcoin Technical’s: Bear Flag Forming
Bitcoin failed to hold above $17,000 at the weekend, opened weak Monday.
Bitcoin is currently trading at: 15,238.9346, -689.03, -4.33%, as of 3:57a GMT, the market open.
Last week I learned that a leaked document suggests that China’s top Internet finance regulator is requesting that local governments push Bitcoin-mining operations towards an “orderly exit” from the industry.
Given that China is home of Bitcoin mining, and accounts for about 70% of the world’s processing power devoted to the process of securing the network, such moves could bring more pressure to prices of the cryptocurrency.
The technical chart also indicates an increased risk of a Bearish breakdown.
The Bitcoin Chart for the October 2017 to Monday frame.
The chart above shows:
- Bear flag is a Bearish continuation pattern. A Southide break – i.e. a close below $14,460 (flag support) would indicate the corrective rally from the low of $10,400 (the 22 December low) has ended and the sell-off from the record high of $19,891 has resumed.
- RSI (relative strength index) is back below 50.00 (Bearish territory).
- Since 21 December trading volumes have remained well below the 30-Day MA. A sharp rise in volume on negative price action Monday boosted odds of a Bearish breakdown in prices.
- A high volume Bearish flag breakdown (close below $14,460) open the way for a fall to $10,400 (the 22 December low). A clear break there sees the next support at $9,965 the 100-Day MA.
- Bullish scenario: On a clear upside break of the flag I would reverse my view and say the Bull run is alive and could mark record highs above the Key psych resistance mark at $20,000.
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