Bitcoin, Bitcoin, Bitcoin.... I am sure there are many of you are there that are just as frustrated as me with how 2019 has turned out for Bitcoin. BTC started 2019 on a strong note hitting $14,000 in late June of this year. But since then, there have been several bullish setups that have completely broken down and the Bears have remained very much in control. As a trader, it has been frustrating to see several bullish setups completely break down and make new lows. I made this chart to identify the breakdowns and hit home how bearish the price action has become.
First there was the bullish continuation pennant from the $14k high that broke down in September to below the 200MA. Next in late October Bitcoin had one of the largest single day gains in its history, breaking out beyond the downtrend and back above the 200MA. It looked as if the bulls had pulled off a very deceptive bear trap and were ready to push the price to new highs. However, this pennant broke down and eventually the falling wedge that followed it also broke down. And it not only broke down, it completely retraced the previous $7,300 low and made a new low of $6,500. This was a very bearish move because Bitcoin broke the neckline of its completed head and shoulders pattern. The target for this is ~$1,000!!! The price has since managed to recover back to the neckline, but has been rejected twice and appears to be throwing up a weak bear flag. The only saving grace right now is the pink uptrend. However, we are running out of room and bullish support. The 700MA which acted as support during the dump in October is now acting as resistance. We have to acknowledge that the price action has been very bearish and the current set up is also indicative of further selling off. I believe fiat is still the place to be until Bitcoin at least breaks above and holds $7500. If BTC can do that, I have the next target to be around $8,800. But it will have to break that neckline first. Until then, play it safe and wait for a better, all-around trade set up to get back in.
First there was the bullish continuation pennant from the $14k high that broke down in September to below the 200MA. Next in late October Bitcoin had one of the largest single day gains in its history, breaking out beyond the downtrend and back above the 200MA. It looked as if the bulls had pulled off a very deceptive bear trap and were ready to push the price to new highs. However, this pennant broke down and eventually the falling wedge that followed it also broke down. And it not only broke down, it completely retraced the previous $7,300 low and made a new low of $6,500. This was a very bearish move because Bitcoin broke the neckline of its completed head and shoulders pattern. The target for this is ~$1,000!!! The price has since managed to recover back to the neckline, but has been rejected twice and appears to be throwing up a weak bear flag. The only saving grace right now is the pink uptrend. However, we are running out of room and bullish support. The 700MA which acted as support during the dump in October is now acting as resistance. We have to acknowledge that the price action has been very bearish and the current set up is also indicative of further selling off. I believe fiat is still the place to be until Bitcoin at least breaks above and holds $7500. If BTC can do that, I have the next target to be around $8,800. But it will have to break that neckline first. Until then, play it safe and wait for a better, all-around trade set up to get back in.