As we covered here some days ago, Bitcoin (BTC) recently broke its dramatic uptrend and seems poised for downside movement. But the leading cryptocurrency is, for now, holding a consolidation pattern just under the $8,000 mark. A new rejection off of $8k would likely send BTC tumbling down for a further retrace.
A glance at the four hour chart, above, will illustrate Bitcoin’s condition. BTC has formed an ascending triangle consolidation pattern, normally a bullish pattern suggesting a break up. However, this pattern has formed as a part of what looks like a bear pennant, which suggests a break further down.
The best case scenario here is a break back above $8,100 or thereabouts, and to stabilize above this level. The other, perhaps more likely scenario is a rejection somewhere between $8-8.1k, and a continuation of a broader retrace down.
A zoom into the one hour chart (above) shows the detail of this consolidation pattern. We see a respect for the 55 hour EMA, whose break may signal an attempt higher. We also see that volume remains low, despite reaching the end of the pattern.
Looking at the daily Coinbase chart, we see little cause for exuberance. Yesterday’s buy volume was weak, as was the daily price candle. It seems that today might be the last day for Bitcoin to prove that it belongs in the $8k’s – even if only in a sideways ranging pattern. Indeed, this would be an ideal scenario for the altcoin market.
Concerns
Notable cryptocurrency analyst Willy Woo came out today with some worrying statements about Bitcoin. Using the well known NVT indicator, he stated that he considers the current price of Bitcoin to be trade-driven, rather than the result of “organic investor flow.”
Presently the market price of BTC has outstripped organic investor flow unseen since the bull market mania phases of 2013 and 2017. Never before have we seen such a divergence so early in the bull market. pic.twitter.com/S3rfBKdlzL
— Willy Woo (@woonomic) June 6, 2019
Indeed, even solely from the charts, a retrace to somewhere between $6-7,000 would not be at all unwelcome. A healthy retrace and consolidation will lay the groundwork for another long term bull market – not just an impressive but short bull rally.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
