Bitcoin Bottom-Finding Season Begins After Critical Breakdown — Price Analysis

  • LTF (Low timeframe) trend: There will be some relief bounces to trade
  • MTF trend: Downtrend very strong
  • HTF trend: Uptrend starting to be pushed to its limits

In what was likely a highly directed price action, Bitcoin (BTC) pulled a classic, massive pump-and-dump this weekend. Bitcoin shed about 15% off of its price in little more than a day. The implications of the move are that the MTF will continue, whereas there was a chance conclude it this weekend; and the HTF uptrend is now highly stressed.

We start on a 2-hour chart to see exactly what happened. Two legs in a LTF uptrend had been put in last week, and a third would have likely broken through the regional market structure and ended the MTF downtrend.

Fakeout and breakdownBTC chart by TradingView

The market was sharply inflated at the end of a consolidation movement, and then battered down just minutes later.

Turning to the daily, we see that the huge drop is still within the HTF market structure. Price dropped down right into the ‘golden pocket’ and is being held there, and Bitcoin can technically slide all the way down to about $6,500 without breaking this HTF structure.

this will likely take a while to shake outBTC chart by TradingView

That would still be very bad for the overall uptrend, though. As we see below, Bitcoin is definitely pushing the limits already. Both the 200-day moving average and the 55-day EMA have been completely abandoned at this point.

Moving to the weekly, we can assume that more downside will be needed, now, in order to find a base of support somewhere. Things look bleak: the EMA fan has started collapsing again, with the 8 about to cross under the 21 and Bitcoin not even closing above the 55 EMA for the week.

Ideally we'll see the histogram cool todayBTC chart by TradingView

The histogram is pointing straight down, in a flat bearish contraction that seems sure to cross negative this week. There is a chance that we could see support come in around $7,500-600, where significant price levels are waiting.

Bitcoin is now definitely in ‘bottom-finding’ season. This weekend’s bloody performance has dashed all thoughts of a quick resumption of the early 2020 uptrend. That uptrend is not yet canceled, but if it survives it will be a much slower-churning one than previously thought.

The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.

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Tim Draper Reveals He Owns Cryptocurrencies Other Than Bitcoin

Michael LaVere
  • American venture capitalist Tim Draper revealed owning more crypto-assets than just bitcoin.
  • Draper expects the value of bitcoin to increase as a result of the Federal Reserve's money-printing tactics. 

American venture capitalist and bitcoin bull Tim Draper claims to own “a lot of other cryptocurrencies” in addition to BTC. 

Speaking in a recent interview with British entrepreneur Rob Moore, Draper claimed that his diversified portfolio in crypto-assets had led to him being “surprisingly up” despite the economic impact of the coronavirus. 

He said, 

You know, when I played Monopoly, I never showed anybody how much money I had so so that you're not gonna get an up or down.

Draper also criticized the U.S. Federal Reserve’s money-printing response to the COVID-19 pandemic, which he said would lead to the dollar crashing in value. He claimed the impact of the falling dollar would drive more value into bitcoin. 

He said, 

There are only 21 million of them and they are going to be more and more valuable as you see governments have less and less.

Draper continued, saying his experience working as a venture capitalist and interviewing entrepreneurs has given him a “pretty good view” of what the future is going to look like. He expects governments to move towards decentralization in a competition for their own citizens. 

Featured Image Credit: Photo via Pixabay.com