Bitcoin (BTC) had a rough time last week, along with just about every other asset in the world, both crypto and traditional. Markets have been tanking, with many speculating that fears surrounding COVID-19 are driving the selling. As the week closed, we acknowledge that an important Bitcoin support level has been lost – a support level that has almost never been lost during HTF Bitcoin uptrends.
We go first to the weekly RSI indicator, and direct our attention to the gray band in the middle. We can see that during the entire, multi-year Bitcoin bull market which lasted from late 2015 to the start of 2018, this support zone was never lost and held every Bitcoin retracement and correction.
We can also see that, last week, Bitcoin lost this level. This would certainly suggest that Bitcoin may not actually be in an HTF uptrend, despite what other technical indicators say. And if it is, we must concede that this uptrend has broken the parameters of the previous one.
Moving to the general weekly chart, we see that things are looking rather bearish here, too. First of all, the important 21 EMA has been lost. Second, the histogram saw an extremely sharp drop for the week; such a sharp profile change is exceptional for the weekly chart, which takes a lot of force to move.
However, we can also see that this is all arrayed against what was an extremely bullish early 2020. Looking at the retracement scale helps us remember this, as Bitcoin has still not reached the emergency zone – not even, in fact, the Golden Pocket area.
Tempering all this bearish observation, we turn to the 4-hour chart and see that it may be time for – if nothing else – a relief rally.
We see a clear series of bull divergences from recent price action, and a histogram that is maintaining well on the positive side and is pointing up. What’s more, price has diverged sharply from the moving averages, and is currently breaking out of a downtrend resistance line.
Things definitely don’t look great for the HTF uptrend, and it is starting to decay. Some big counter-rallies would be needed in the coming week to restore some confidence. In the meantime, however, we are likely to see a bit of relief. Perhaps above all of these we should keep in mind that: everything is doing bad.
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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