Bitcoin’s (BTC) short term downtrend is showing a couple of tepid signs of strength, although nothing dramatically convincing. A lot hangs in the balance, now, with the leading crypto still having a chance to break its long downtrend.
Starting with a 2-hour chart, we can see that a tiny bull divergence has started to show up on an oversold RSI, on some of the bounces of this small downtrend. Well within clear support and having completed three clear legs (out of a typical three), we might speculate that this correction is over or nearly so.
The histogram here has started pointing down again, but only vaguely; there is no accelerating down arch showing up at this time, which may suggest an absence of downside momentum.
If this correction is not over, however, we can at least look to the possibility of support down to $7,600. If buying came in anywhere within this range, we could well imagine the medium term uptrend preserved; and with it, the possibility of a trend reversal from the long term downtrend.
Today’s histogram is looking pretty ugly, though, although trading is not done for the day. Bulls would have to step in during the next ten or so hours in order to push this indicator into a more appealing shape; if not, we should probably expect losses down to $8k at least.
Finally, looking on the weekly chart, we are reminded that the current losses may be no correction at all, but instead a reversal of the medium term uptrend. Such a reversal would be a continued adherence to the longer downtrend, clearly illustrated here.
Here, the 21-week EMA looks really important. Break that and a couple of things happen: A) the recovering weekly EMA fan stops recovering, and continues its bearish inversion, which is a very nasty weekly indicator; B) this week’s candle will probably bearishly engulf last week’s gains, painting another ugly signal on the chart. As we can see, the 21 has just been tickled so far.
This week was forecast to be important for Bitcoin, and so it is. A destruction of this medium uptrend will preserve a huge downtrend going into 2020. And Bitcoin is getting close to its limits.
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