Jonathan Morgan
Independent Analyst
- Bitcoin price moves below the September 7th flash crash low.
- Daily oscillators show little near-term support, instead point to continued selling pressure.
- Extreme anticipated lows could target a return to the $25k value area.
Bitcoin price spent the majority of last week testing a breakout above $49k but could not do so. As a result, Bitcoin bulls are trapped between $47k and $49k. Bulls now feel the pressure to abandon those longs as Bitcoin flirts with testing lower to $40k.
Bitcoin price halted against $49k; bulls slaughtered as broader externalities weigh on cryptocurrencies
Bitcoin price faces its second major sell-off and most profound drop since the September 7th flash crash. Bulls have made several attempts to support price as it moved to the daily lows near $42.5k but have been unable to return Bitcoin to $45k. Thus, bulls' near-term resistance will be the $45.6k value area, which contains the Tenkan-Sen and Senkou Span A in the Ichimoku system.
The current Ichimoku conditions for Bitcoin price are overwhelmingly bearish. All conditions for an early bearish entry within the Ichimoku system have been met:
- Price below the Tenkan-Sen and Kijun-Sen.
- Tenkan-Sen below the Kijun-Sen.
- The Chikou Span below the Candlesticks.
- Future Senkou Span A sloping down while Senkou Span B is flat or rising.
Bitcoin price should find support from bulls at Senkou Span B ($40k).
BTC/USD Daily Chart
The bearish trading conditions and outlook for Bitcoin price will be invalidated if the Chikou Span can close above the candlesticks. For that to happen, bulls would need to push Bitcoin higher and close at or above $49.7k.
All Bitcoin traders and investors should be aware of the Evergrande debt crisis's externalities on all financial instruments, especially risk-on speculative instruments like Bitcoin. If a broad sell-off occurs in equity markets, then expect a more powerful sell-off to occur for Bitcoin price – within the same vein and move as March 2020.
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