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Bitcoin’s Cloud Pattern Shows Bears May Still Be in Full Control



  • Bitcoin and the entire cryptocurrency market are currently bearing witness to relatively mixed price action
  • While BTC has faced some intense selling pressure, it is important to note that bears have not invalidated any of its mid-term market structures
  • As such, it remains well-positioned to see further near-term upside
  • Despite this, one analyst is noting that the cryptocurrency’s cloud formation may spell some trouble for its near-term outlook, as it shows that it is still stuck beneath some crucial levels
  • Whether or not it can shatter through these levels should offer insight into its short-term trend

Bitcoin is once again stuck below $12,000, with an influx of selling pressure incurred yesterday causing its price to slide significantly lower.

It now appears that it is beginning to respect similar range boundaries to those set throughout the past few weeks, with support at $11,600 and resistance around $12,000.

Despite not being able to reclaim $12,000 just yet, the cryptocurrency’s outlook remains somewhat positive in the near-term, as the strength of sellers has so far proven to be somewhat limited.

One analyst is pointing to a few key levels he is closely watching, noting that Bitcoin isn’t out of the woods until these levels are firmly surmounted.

Bitcoin Falls into Previous Trading Range, Opening the Gates for Downside

At the time of writing, Bitcoin is trading up just under 1% at its current price of $11,810.

This marks a rebound from daily lows of $11,600 but also marks a decline from highs of over $12,000.

Because BTC is now trading within the same trading range that it was previously caught within, analysts believe that a visit to its previous macro range lows of $11,000 may be imminent.

“BTC simplicity for current range,” one analyst stated while pointing to the below chart.

Image Courtesy of Pentoshi. Chart via TradingView.

As seen on the analyst’s chart, it also appears to be a possibility that Bitcoin is forming a classic Wyckoff Distribution pattern.

BTC Has Yet to Recapture These Key Technical Levels 

Another factor currently counting against Bitcoin is its inability to recapture a few moving averages that reside within its cloud formation.

While speaking about this, one analyst noted that he is not shorting BTC until he sees a clearer reaction to these levels.

“The cloud still doing its thing. Saved me a few time from fomo longing – will scale back in once support is claimed back inside/above it. Till then I’ll just watch, no interest to short.”

Image Courtesy of Teddy. Chart via TradingView.

Unless Bitcoin incurs further buying pressure that allows it to surmount this key region, downside may be imminent.

Featured image from Unsplash.
Charts from TradingView.

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3 reasons why Bitcoin price has not been able to rally back above $40K




The ongoing story for the past couple of months in the cryptocurrency market has been confusion on whether Bitcoin (BTC) is destined for another leg down or is finally ready to break out toward new highs.

Bitcoin’s price history and data from previous corrections suggest that the current struggles for the top cryptocurrency could persist for a little bit longer due to the strengthening dollar, the possibility of decreasing economic stimulus and a slew of technical factors connected to Bitcoin’s price action.

A strong dollar threatens Bitcoin’s recovery

According to data from Delphi Digital, one of the biggest factors placing strain on risk assets around the globe is the strengthening U.S. dollar which appears to be attempting a trend reversal after falling below 90 in late May.

DXY 1-day chart. Source: TradingView

Rising dollar strength put a halt to the year-long uptrend in the 10-year US Treasury yield which is also a reflection that the economic expansions seen in the first half of 2021 are beginning to lose steam and there is a threat that a new wave of Covid-19 infections threatening the global economic recovery.

Fractals and the Death Cross suggest the correction is not over yet

The short-term outlook for Bitcoin remains bearish as previous instances of the “Death Cross,” which appeared on BTC’s chart in late June, have been followed by a corrective period that can last for nearly a year.

Bearish crossover of the 50 day and 200-day MA. Source: Delphi Digital

According to the analysts at Delphi Digital, the 12-month moving average is being tested as support, and a dip below this level would signal further downside for BTC price.

Bitcoin price testing the12-month moving average. Source: Delphi Digital

The 12-month moving average has been a key support level for Bitcoin historically, so how the price performs near this level could dictate whether the current uptrend remains intact.

Related: El Salvadorians take to the streets to protest Bitcoin law

Overall, caution is warranted for traders because low volumes have historically led to higher volatility when fewer open bids can lead to rapid price fluctuations.

As explained by Kevin Kelly, a certified financial analyst at Delphi Digital, “the short-term outlook turns quite a bit more bearish if and when we break those key levels” near $30,000.

Kelly said:

“I don’t necessarily think that we will see as nearly as significant of a drawdown as we did in say, post-December 2017, early 2018, and into the end of that year. But I do think, just given the structure of the market, that we could potentially be in for a bit more short-term volatility and potentially some more headwinds here, in the near term.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.