BITCOIN - Potential Breakdown After Breaking Out of Its Channel

BTC fell out of its bullish ascending channel which catapulted it from $29,000 to $50,000. It is currently testing the bottom of the channel which was support, but is now acting resistance. You can see the similar channel breakdown that Bitcoin completed in May to the left. Typically this results in further movement to the downside. Bitcoin has been very bullish of late and could very well blast through this resistance and back to the channel. It's important to consider it as a possibility. But with the bearish divergence on the MACD and breakdown from the channel, it will likely head down to the next strong support area at $44k. From here, we'll assess it's strength or weakness to determine its direction.

Comment:

It's important to note that these two examples were under very different circumstances and therefore the results of the breakdown could be very different. The channel from May was already in a bearish breakdown from the all-time high, which is why the severity of the correction was so great. I'm not suggesting that we'll have a correction that large from this channel breakdown, which is why I noted that we'd have to consider how Bitcoin reacts to the $44k level to see how strong or weak it is.