We’re watching the market trends and charts and it appears that Bitcoin may be on the precipice of another fall. For those who want to invest long-term, this might be a great opportunity. Let’s review what’s happening.
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Bitcoin is now trading below the $8,000 level and the digital currency is struggling to rise towards the top of the descending channel. However, observing the weekly chart of BTC/USD we can see that it took over a year for the price to rally, however, it took only a few hours to hit bottom. So, it takes a lot of time to build the confidence needed to help the price rally but it does not take much for the price to crash.
We have seen that happen over and over again in the case of Bitcoin (BTC) which is why we now see a strong possibility of the price crashing not only below $7,000 but below $6,500 down to the bottom of the descending channel.
We can see that Bitcoin ran into strong resistance and has now failed to break past it. This price action coupled with the extremely bearish outlook of the S&P 500 (SPX) points to a sharp decline in the cryptocurrency market in the near future.
Regardless of the fact that you aim to book profits on both sides, as a trader you inherently take a direction hoping for either of two scenarios to happen. This week the price will keep making attempts to rise towards the top of the descending channel and potentially break above it or decline towards the bottom of the descending channel and eventually break below it. Bitcoin’s price has been closing not only below the 50 day EMA but also the 200 day EMA every day for the past week. This is an alarming situation for all cryptocurrencies not just Bitcoin (BTC) or Ethereum (ETH).
Altcoin prices are steadily climbing to where they were before the downtrend began and if that comes, there is a very strong probability of Bitcoin (BTC) breaking below the descending triangle which means that chasing the price to the upside/long positions are not right, as the fall could be harder than expected.
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