With only a couple hundred dollars worth of slack to go before a major breakdown, Bitcoin (BTC) looks shaky and may soon head down for another leg of losses. As we covered yesterday, another small leg down can be accommodated within the high timeframe uptrend; but anything more than that will signal a likely breakdown of the trend that could last all of 2020.

We start on a 4-hour chart and see, first of all, consistent failure of Bitcoin to stay above the 8 EMA. The EMAs are all continuing to point down, and the LTF continues to be bearish with almost no relief since this weekend’s massive rejection.

LTF breaking downBTC chart by TradingView

We see on the RSI that a progression of promising higher highs and lows has broken down, with a lower high and low forming on the current candle. We also see the histogram rolling over and about to continue a bearish expansion. The blue buy zone here might be tested once again, and seems unlikely to hold for a third time; this zone may serve as an inflection/resistance zone soon.

Moving to the daily, we see that Bitcoin’s price is exactly confluent with the regional inflection line. Holding anywhere around here would save the larger Bitcoin uptrend, constituting a higher low (and forming a giant head & shoulders pattern on this chart).

No MTF downtrend end in sightBTC chart by TradingView

Anything lower than $7,600 would essentially invalidate this structure, excepting some truly incredible black swan buying. Bitcoin already, in fact, tested this level on a wick, which was the blue buy zone on the previous chart.

If we back way back to the weekly, we see the larger scope of things is also looking dangerous. Drawing a trendline all the way from the bottom of the 2018 bear market, through the 2019 bottom (a generous trendline at that), we see how little room Bitcoin has left to play with.

Very little room left to play withBTC chart by TradingView

Bitcoin needs to show some serious support, and soon. It may prevail that in this global economic atmosphere, assailed by the economic impacts of COVID-19, that support may not show up.

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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