Multiple bearish signs have surfaced in the Bitcoin chart, suggesting the rally's top may be near.
In classical technical analysis, the bearish wedge that we now see in the Bitcoin chart usually appears at the very end of a rally that has enjoyed a prolonged period of gains. This pattern is formed when there is a consistent distribution (selling) from smart money (smart investors) to dumb money (Tom, Dick and Harry... or Harriet, if you support gender equality).
The fact that Bitcoin is nearing the end of its rally is further confirmed by the Elliott Wave bearish count that we have been keeping track in our private member forecasts. The weakness in the trend can also be seen through the RSI bearish divergence across multiple time frames, from hourly to daily. A bearish divergence occurs when prices continue to form higher highs in a bull market while the RSI is forming significantly lower highs (opposite to prices).
Here are the two big questions.
Will Bitcoin still see $20K in this rally? Yes.
Will the price stay above $20k. No. The visit to $20 will be short-lived.
Many bullish traders are expecting the Bitcoin prices to skyrocket as soon as they see a breakout from the all-time high near $20k. However, keep in mind that markets "always" move against people's emotions and right now, the emotions (or market sentiment) are extremely bullish (greedy), reminiscing the exact level of extreme sentiment that Bitcoin had at the peak of its 2017 rally. If prices start to shoot up to $21k or $22k, "do not" hop in because FOMO market reaction usually ends badly. As a matter of fact, the exact same thing happened back in December 2017 when the Bitcoin prices shot up (breakout) above a similar bearish wedge before the market rapidly crashed to $11k.
Based on our analysis, Bitcoin is likely to touch $20k for a short while before the prices come crashing down to the nearest key support at $16.8k. This pivotal support level would be crucial in determining whether prices would continue to reach new all-time highs or dive into the trenches. Like this chart to encourage future updates.
In classical technical analysis, the bearish wedge that we now see in the Bitcoin chart usually appears at the very end of a rally that has enjoyed a prolonged period of gains. This pattern is formed when there is a consistent distribution (selling) from smart money (smart investors) to dumb money (Tom, Dick and Harry... or Harriet, if you support gender equality).
The fact that Bitcoin is nearing the end of its rally is further confirmed by the Elliott Wave bearish count that we have been keeping track in our private member forecasts. The weakness in the trend can also be seen through the RSI bearish divergence across multiple time frames, from hourly to daily. A bearish divergence occurs when prices continue to form higher highs in a bull market while the RSI is forming significantly lower highs (opposite to prices).
Here are the two big questions.
Will Bitcoin still see $20K in this rally? Yes.
Will the price stay above $20k. No. The visit to $20 will be short-lived.
Many bullish traders are expecting the Bitcoin prices to skyrocket as soon as they see a breakout from the all-time high near $20k. However, keep in mind that markets "always" move against people's emotions and right now, the emotions (or market sentiment) are extremely bullish (greedy), reminiscing the exact level of extreme sentiment that Bitcoin had at the peak of its 2017 rally. If prices start to shoot up to $21k or $22k, "do not" hop in because FOMO market reaction usually ends badly. As a matter of fact, the exact same thing happened back in December 2017 when the Bitcoin prices shot up (breakout) above a similar bearish wedge before the market rapidly crashed to $11k.
Based on our analysis, Bitcoin is likely to touch $20k for a short while before the prices come crashing down to the nearest key support at $16.8k. This pivotal support level would be crucial in determining whether prices would continue to reach new all-time highs or dive into the trenches. Like this chart to encourage future updates.
