Bearish signs arise

Bitcoin has erased nearly 14% in the past five days, falling below $64,000. In the process, it broke below the ascending trendline that connects peaks from January 2023 and March 2023. On top of that, technicals like RSI, MACD, and Stochastic have continued to decline on the daily time frame, which is turning increasingly bearish and could imply that the correction is not over yet. Accordingly, levels to watch out for lay at $64,895, $60,000, and $59,250; the inability of the price to regain ground above $64,895 will be worrisome. Furthermore, a breakout below $60,000 will strongly bolster a bearish case. In our opinion, the current setup presents an attractive short trade entry below the ascending trendline shown in Illustration 1.03 and a tight stop-loss order above it.

Illustration 1.01

Illustration 1.01 shows the daily chart of BTCUSD. The yellow arrow highlights a bearish breakout below the ascending trendline. This trendline is important to watch out for, considering Bitcoin has hovered overextended above it since the start of March 2024.

Illustration 1.02

The picture above displays the daily chart of BTCUSD and simple support/resistance levels derived from past peaks and troughs. The yellow arrow indicates a bearish breakout below support at $64,895 (now acting as a resistance).

Illustration 1.03

Illustration 1.03 shows a short trade entry setup.

Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of multiple indicators.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.

Comment:

The number of Bitcoin addresses with balances exceeding 1,000 BTC has been ticking slightly higher in the past seven days while the price of Bitcoin has been falling. This dynamic is something to monitor in the following days as it might suggest big players could be gaining some appetite for Bitcoin at lower prices. Nevertheless, so far, the uptick in the figure is not very significant.

Illustration 1.04

Illustration 1.04 shows the daily chart of BTCUSD and an alternative trendline that acts as a support. If it is broken, it will further bolster a bearish case.

Comment:

The number of large speculators continues to tick higher, suggesting some of the large players bought the dip.