Happy Friday everyone! Unfortunately, when I look at the bitcoin chart lately it puts me in a bearish mood. As we all know bitcoin primarily drives the market, so as long as bitcoin remains bearish, the rest of the market will as well.
Bitcoin Daily Chart
So, we are only going to look at one chart today, the daily chart. The daily chart shows everything we need to see. As you can see bitcoin is now forming a descending triangle which is a bearish formation so my expectations are for a breakdown out of the triangle.
So what would it take to change my mood? I would need to see bitcoin break higher out of the triangle and at least set a higher high (#2). What really would help is to see bitcoin push higher back up into the distribution zone and then consolidate there for a while (#1).
Of the three scenarios I show on the chart I believe #3 is the most likely to occur.
If I am correct and scenario #3 does play out what I want to see is for bitcoin at some point to hit a bottom and start forming an accumulation bottom as shown in the chart above. There is no way of knowing at what price this may occur, I hate to say it but a correction of equal percentage as the last two would take the price down to around $10k. Although I don't like the idea of this bull market being over already and having to go through another long bear market, being able to accumulate BTC around $10k would be nice! Plus, can you imagine where the prices of some of the really great altcoins would be at? If it does play out this way I will be loading up more than I ever have with bitcoin and a bunch of altcoins!
I want to reiterate that just because I am interpreting the chart as bearish it doesn't have to play out that way. It is possible that bitcoin could push higher from here as shown in scenarios 1 or 2, although my feeling is that is highly unlikely. Bitcoin could also start forming an accumulation bottom around where it currently sits or maybe a little lower, then after a period of time (months) move higher again starting a new bull market. Because bitcoin fell over 50% in this correction I have to consider the previous bull market over and that bitcoin is now in a bear market.
All we can do now is wait and watch what the price does from here.
That's all I've got for now. Take care!