BITCOIN BREAKS DOWN: FALSE BREAK OR MORE DOWNSIDE?
Hi guys, this is OG back with another Bitcoin update. If you find value in my work, please do like, share, and comment. And also feel free to share your ideas and technical analysis in the comments below.
Bitcoin just broke down from the confluence of support zones, namely the trendline support @ 38.5K, the previous swing high also @ 38.5K and the 200MAs on the 1H timeframe @ 38K. Upon the breakdown, we also saw a spike in volume, suggesting that there is conviction in the breakdown. The question now is if this is a false breakdown or if price will continue to crash lower. A couple of scenarios below:
1. For me to consider this a false breakdown, I would need to see price close above the high of the breakdown candle, which is @ 38.6K. And if that happens with a large body candle alongside strong volume, I would actually consider entering a long position, as it would be the first successful bounce off of the 200MAs after price broke above them.
2. If the low of the candle following the breakdown candle, which is @ 37.5K, is broken, and especially if a 1H candle closed below that, then this is likely a genuine breakdown, and depending on how far down price has gone when this happens, I might consider entering into a short position. If price has moved down quite a lot, then I will likely pass up on the trade, whereas if price hasn't, then there will be more room for price to move down, and I'd be more interested in taking the short.
The reason why I'm not jumping into a short right now is because while price did break down from the support zone, it barely closed below the 200MAs, so theres still a chance for a bounce here. Had price closed further down beyond the 200MAs, I would have entered a short on the breakdown candle close. Of course, ultimately you decide how you want to trade this and whether to enter a trade now or wait for confirmation or pass up on this setup altogether.
FYI: I use long or short simply to indicate whether the market is bullish or bearish, not as a signal to go long or short at the time of publishing the idea.
Check out my technical analysis videos for more in-depth analysis and trade setups for Bitcoin, Ethereum, and Altcoins.
Why follow?
1. Community of Technical Analysts sharing analysis and trades
2. Live tracking of whale wallet movements
3. Live update of the latest important news
4. Live syncing of popular crypto tweets
5. Ebook covering how to be profitable in the cryptocurrency market
As always, I’m not a financial advisor, all information presented is for educational purposes only and not meant as financial or investment advice, do your own research, and stay safe!
Bitcoin just broke down from the confluence of support zones, namely the trendline support @ 38.5K, the previous swing high also @ 38.5K and the 200MAs on the 1H timeframe @ 38K. Upon the breakdown, we also saw a spike in volume, suggesting that there is conviction in the breakdown. The question now is if this is a false breakdown or if price will continue to crash lower. A couple of scenarios below:
1. For me to consider this a false breakdown, I would need to see price close above the high of the breakdown candle, which is @ 38.6K. And if that happens with a large body candle alongside strong volume, I would actually consider entering a long position, as it would be the first successful bounce off of the 200MAs after price broke above them.
2. If the low of the candle following the breakdown candle, which is @ 37.5K, is broken, and especially if a 1H candle closed below that, then this is likely a genuine breakdown, and depending on how far down price has gone when this happens, I might consider entering into a short position. If price has moved down quite a lot, then I will likely pass up on the trade, whereas if price hasn't, then there will be more room for price to move down, and I'd be more interested in taking the short.
The reason why I'm not jumping into a short right now is because while price did break down from the support zone, it barely closed below the 200MAs, so theres still a chance for a bounce here. Had price closed further down beyond the 200MAs, I would have entered a short on the breakdown candle close. Of course, ultimately you decide how you want to trade this and whether to enter a trade now or wait for confirmation or pass up on this setup altogether.
FYI: I use long or short simply to indicate whether the market is bullish or bearish, not as a signal to go long or short at the time of publishing the idea.
Check out my technical analysis videos for more in-depth analysis and trade setups for Bitcoin, Ethereum, and Altcoins.
Why follow?
1. Community of Technical Analysts sharing analysis and trades
2. Live tracking of whale wallet movements
3. Live update of the latest important news
4. Live syncing of popular crypto tweets
5. Ebook covering how to be profitable in the cryptocurrency market
As always, I’m not a financial advisor, all information presented is for educational purposes only and not meant as financial or investment advice, do your own research, and stay safe!
