Bitcoin Price Predicted to Reject the Bulls and Crash Lower
Many financial forecasters are predicting 2019 to be bullish for the bitcoin price. The cryptocurrency, however, in the coming months will first have to fight strong technical barriers.
Bitcoin bulls are finding it very difficult to initiate a substantial push towards the $3.480- barrier and beyond. Simultaneously, their presence at the support area which is above 3.371 is preventing the price from falling further. This has resulted in the Bitcoin remaining rangebound, because of which the bearish sentiment is increasing in the near – term scenario.
Looking at the intraday / weekly level, because of the two pressing issues, which are lower volatility and volume, there is a possibility that the Bitcoin could now pursue another selling action. The following discussions could be made: 120
Reportedly the Bitcoin is imitating the price action between January 26 and January 27. However, back then, the trend was inside a triangle formation. The volumes also started to diminish as the pattern began to extend and the trading range started to contract. The bitcoin price broke down from its triangular pattern on January 28. 173
The bitcoin chart is experiencing a similar trend in the current trading range. The price trend is in 191 the formation of a new triangle pattern. Also, there 200 has been a decline in the Bollinger Band’s gap and hourly volume. The bitcoin, like in the past has crossed beyond the channel support forming a higher high towards the resistance of a medium-term falling wedge pattern. And just in the first case, it has come back inside the triangle channel.
Going by this scenario, there are chances that the bitcoin price may retest the channel resistance, 268 only to follow a pullback action towards the channel support. After that, either there could be a consolidation of the price inside the channel or attempt a breakdown towards the falling wedge support.300
In technical terms, a falling wedge pattern symbolizes a bullish indication. The representation is somewhat broad at the top but narrows as the asset moves lower, simultaneously forming reaction highs and reaction lows that converge eventually. The asset experiences a resistance breakout only to find a new support area, after the closing in towards the cone’s apex.
Similarly, the bitcoin price is closing in on its falling wedge’s apex. In ideal circumstances, there is a likelihood of it breaking out to the upside. However, we cannot rule out the possibility of a breakdown after considering the volatile nature of the market.400 There are chances, that the price could be pushed back towards the $3.100 mark, which was the market’s previous bottom level. 420
Currently, it is ideal to keep the trades inside the triangle channel. Having said that, it must be noted that only small profits will be made by entering a long position towards resistance on a pullback from support. Simultaneously, to minimize losses in case the trend reverses, it is advisable to maintain a stop-loss order 1-pip below the swing low.
Similarly, a decent short opportunity would open towards support which would provide a stop loss 1-pip above the local swing high.