It is clearly noticeable that the rally off the has become weaker on each occasion. Currently, is low relative to historical price action which is clearly illustrated by the narrowing of the . Low is a precursor for impulsive price action, which suggests that spill to the downside from here may possess the required momentum to finally break through the resilient .
Should we break through, I expect the price to fall hard and fast. Looking at previous levels of significance, I believe that likely areas of potential support exist at $5000 and $3000 (red dashed lines). Of course, it is also possible for the price to break out the prevailing with a move to the upside. We will need to see the price move above at least the local high at $7500 and then $8500 before bulls can start to claim that the is invalidated (blue dashed lines).
Bitcoin has had a torrid 2018 and whilst personally I am on Bitcoin and crypto in general from a fundamental perspective, the harsh reality is that in the short/ medium term things can get worse. Bear markets that follow periods of extreme overperformance, as witnessed in crypto markets last year, commonly experience extended periods of underperformance. At least for now, a battered Bitcoin continues to tread warily above the icy crust, but a crack in the frozen surface is likely to give way to a hypothermic decent.