From a market perspective, there isn’t much to say on days like today. Bitcoin’s (BTC) breakdown starting last Sunday culminated yesterday in a truly astounding capitulation event – along with altcoins, as well as traditional markets – the likes of which the leading crypto has nary ever seen. The main takeaway of this is that, Bitcoin’s high timeframe uptrend – still intact just a day ago – is now utterly destroyed. From a technical perspective, there is now no basis of expectation within the markets.
On the 3-day chart, we see the scope of the carnage. Overnight, price fell completely through its retracement range, through the historic support of $6,400, wicking all the way down to near the bottom of the 2018 bear market. On all major exchanges, price dropped below $4,000 for the first time in nearly two years.
From open to close, price fell about 38% percent in a single day: one of the largest Bitcoin losses ever in a single day. Again, all previous market structures within a yearly window have been unravelled.
Which means we have to go bigger. On the weekly chart, we see one possible scenario for Bitcoin price action for the rest of 2020, which is a sideways action within a roughly $3k range.
If this is the case, what we would be seeing is a gigantic, multi-year consolidation structure nearing – relatively speaking – the end of its coiling. These are some of the only realistic structural lines we can muster, at this point.
Finally, coming down to the LTF, we must remember that technical analysis is no longer very useful. There is no telling if we’ve seen the bottom, but it seems likely that the capitulation event is over.
We would like to see Bitcoin take $5,600 and the 8 EMA, and hold them both as we head into the weekend. Happy Friday the 13th.
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