Okay, it has been about two days since the flash crash. So where does the price of bitcoin stand today? Well, I wish I could say that bitcoin was well on its way to recovering. Unfortunately, I can't say that bitcoin continues to look very weak and so far there are no signs of the downtrend that it has been in for the last 10 days ending. Bitcoin remains trapped below the 4-hour 21 EMA, so far every attempt to rally has been met with increased selling.
Bitcoin 4-hour Chart
As you can see in the 4-hour chart above bitcoin just can't seem to push above the 21 EMA. Until bitcoin can build enough bullish momentum to push it through the 21 EMA there can be no recovery.
Bitcoin - Distribution Top
There was a period of time when I felt that bitcoin's price action between February and the first part of this month was a very healthy consolidation but I was wrong, that period of price action actually was a distribution top. Comparing the two patterns above you can see that they are very similar. The top pattern is bitcoins price action from February to yesterday and the bottom image shows the Wyckoff distribution topping pattern. Although, that obviously was a top the million-dollar question is was that the peak of this bull market? It really is too early to tell, we are going to have to watch bitcoins price over the next few days for clues as to which direction it is going. I have heard more people say that it is possible we will see a bull market similar to the 2013 bull market which I also feel is very possible.
Although I am sure that most everyone is hoping that this bull market continues for a long time, we also need to keep in the back of our minds that there is a chance that was the top.
Even though that would really suck, it is wise to keep yourself open to all possibilities.