Its ability to cling on to $8,000 was tested today and bitcoin was found wanting. A 3 percent slump now sees the market-dominating crypto fighting for stability above $7,800. Alarmingly, with little to shout about in terms of resistance, unless the price gets back above $8,000 with some conviction, the signs are that a huge correction is on the cards.

A break down from the current price could well result in a $2,000 move that would see BTC flailing for support at $5,900 where historic buy-in interest has been waiting before.

Of course, there can be no guarantee that the market is certain to fall a further $2,000 in the next few days.

Its current value within touching distance of $7,900 is in the vicinity of historic support, and the $7,400 line was the elastic which catapulted BTC back above $10k barely a month ago.

A similar pattern could be played out if the market can hold the current price until the weekend.

However, if it can’t climb above $8,000 in that same timeframe, then a daily chart death cross (where short-term and long-term moving averages collide) seems an inevitability.

This almost always signals a serious bearish outlook and heralds a mass sell-off. Intriguingly, this has only happened on two occasions in the last five years and, each time, it led to pull-backs of between 60 percent and 70 percent.

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