Bitcoin bear market may have set in. I have recently been reading a lot of news articles and a lot of professionals give their take on whether we are in still in an uptrend or not. Many professionals have been agreeing that they are still bullish on Bitcoin – I am not. Here are my reasons why we may well be in a bear market again.
This is not financial advise, this is just my own personal opinion, based on what I am seeing in the market. I urge everyone to do their own research. To learn and grow as a trader. The more you know, the better you can protect your investment and maximise your potential gains.
The Death Cross
This happens when we see the 200 day MA (Moving Average) rise above the 50 day MA (or rather the 50-day MA moves under the 200-day MA). This happened on the 1-hour timeframe for Bitcoin on the 12th of July. It has now extended to also occur on the 2-hour and 3-hour timeframe, with a possibility this could extend into the 4-hour timeframe.
The death crossover is an indicator of a coming bear market, i.e. a downtrend. It is considered one of the most reliable technical indicators.
Head and Shoulder Neckline Broken
A Head and Shoulder (H&S) pattern emerged on the 4-hour chart after Bitcoin made its second attempt to break the recent YTD high and failed. On the 14th of July Bitcoin reached the neckline and broke it in stunning fashion. It made an attempt at recovery but was rejected, as the previous support had now turned into resistance.
It’s considered a very reliable trend reversal indicator.
Double Top Formed
Investopedia refers to this as an extremely bearish signal – indicating a trend reversal. The first top was formed on June 22nd when Bitcoin reached a year-to-date (YTD) high of $13,800. The second attempt was made, and therefore the double top was formed, on July 10th. Bitcoin reached $13,152 and failed at its second attempt, kicking in a rather evident down-trend and a possible trend reversal.
2019 Looks Exactly Like 2017
We all had high hopes that this would be the time where Bitcoin would finally break the previous all-time-high (ATH) set in December 2017. We have all experienced an extremely long crypto winter, and if history were to repeat itself, then now was the time.
When looking at the chart in the 1-day view, a familiar pattern emerges for 2019. A pattern that looks very familiar, if not exactly like what it did in 2017. Below I have drawn up 2017 above, compared against the trend we are seeing here in 2019.
Here is the view from 2019 – what we are currently seeing on the 1-day timeframe.
Here is the view for Bitcoin that we are seeing on the 1-day timeframe for 2017’s Bitcoin bull-run.
Beyond the Technical Analysis
Beyond the technical analysis, there is a lot more information to dig into and gain a better understanding of, as these may also very well impact Bitcoin to some degree. For the purpose of this insights piece, I have focused on the technical indicators that I am seeing coming into play or having played out.