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Bitcoin (BTC) Weekly Bearish Divergence forming

BITSTAMP:BTCUSD   Bitcoin / U.S. Dollar
Bearish divergence has been spotted forming on the weekly chart for Bitcoin . Volume has also been decreasing the past few weeks.

So what? Bitcoin is going to the moon right? Sure – but to get there it needs to experience a correction from time to time. Think of it as breathing out (price goes down) before breathing in again (price goes up). A correction is only healthy and allows bitcoin the opportunity to continue upwards.

If the bearish divergence is still visible once the next weekly candle closes it could signal the start of a larger correction.

The last time we saw bearish divergence on the weekly chart it led to a 72% drop. If the same thing were to happen, this would see the price drop to
-First support between $32,000 - $38,000 (44% drop)
- Second support between $16,000 - $20,000 (72% drop)
These are the only two weekly support areas we have since breaking through the previous all time high.

Do I think we will fall to $16,000 – No.
Should we have a plan in case we do – Absolutely.

This idea is not about spreading fear, nor do I think this will happen BUT when trading you should expect the unexpected, and have a plan for every scenario.

I’m ready, are you?

Happy trading.




Comments

always be prepared and never hope or assume..
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@neyus, Couldn't agree more.
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