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The recent price action of the Bitcoin suggests that the leading cryptocurrency may be ready for another sell off. Since last November when the currency peaked it has seen a sharp decline with retracements along the way. With inflation and recessionary pressures prevalent short-term volatility remains high as the market determines how to price the asset. The Jackson Hole symposium is set to begin on Thursday in the USA and may effect the price in the short term if bullish or bearish sentiment comes from the event.
The long-term outlook for Bitcoin is bearish. With constant sell downs and both the 50 Day and 200 day moving average both firmly pushing towards the downside. Furthermore, the price has not been able to sustain any significant rally and has broken through its major support at $30,000 USD.
Recent Price Action
The concern for BTC is that it has sold out of the channel that it had been consolidating in and has therefore rejected the upward move. Similarly, the price has followed this action, twice before with both resulting in sell offs. These patterns appear as traps for bulls because, buyers begin to feel FOMO and then enter long only to be ‘fake out’ as sellers soak up the buying volume and then continue to push the price back down. The RSI also supports more selling as it currently sits at 38 whilst the prior sell offs reached below 20. The RSI also looks to have made a triple top as shown in the chart further indicating that sellers may be ready to drive the price down further.
The concern for buyers is that this current sell off may not be finished. The 5-hour pattern looks to be forming a bear flag/pennant. If the price can break below it may fall to the next support at $17,000/18,000 USD. This pattern is to be expected and is just reflective of sellers taking a breath before they continue to push the price lower. The price has also fallen back below the 50-period moving average indicting short term bearish sentiment. If the short-term target of $ 17,000/18,000 USD cannot hold the next target is the $13,500 USD level.
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