The Bitcoin price has initiated a downward move, which has put into play a bearish medium-term scenario in which the price could drop to $7000.
Cryptocurrency analyst and trader @murocrypto stated that the Bitcoin price structure suggests that we are in a bearish market. He outlined the closest support area at $7000.
Let’s take a closer look at the Bitcoin price movement — along with technical indicators — and decide where the price will go to next.
https://twitter.com/MuroCrypto/status/1196691980736237568
Previous Movement
Since June 26, the Bitcoin price had been trading inside a symmetrical triangle. The price broke down from this pattern on September 24. Afterward, the Bitcoin price initiated a rapid upward move on October 25. While this was initially seen as the beginning of a new uptrend, signaling that the bottom is in, the subsequent price movement makes us believe that it was a validation of the previous support line as resistance. There are two support areas, one minor at $8000 and the other near $7000. A breakdown below the latter would likely cause the price to fall towards $5000.
The entire upward move throughout May/June/July was preceded by a bullish cross between the 100- and 200-day moving averages (MA).
Now, the opposite has occurred — since we have a bearish cross between the aforementioned MAs. This is another bearish sign.
Current Bitcoin Breakdown
In the short-term, the Bitcoin price broke down from a descending wedge. It is not currently following any clear trading patterns. The volume on the breakdown was weak. This increases the chances that we will see a bounce at $8000. However, due to the bearish long-term market structure, we do not think the small levels of volume make it sufficient for this to be considered a fake breakdown.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
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Disclaimer
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.
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