Following bitcoin's recent losses, a key long-term trend indicator is looking increasingly bearish.
Notably, the five-month moving average has rolled over in favor of the bears and looks set to cut the 10-month MA from above, signaling a bearish crossover for the first time since June 2014.
Following an identical crossover in June 2014, the cryptocurrency subsequently dropped by 70 percent in the seven months leading up to January 2015.
This time around, the bearish crossover will likely occur at the turn of the month, if bitcoin extends the current decline towards the $7,000 mark, and would open the doors for a deeper sell-off towards the $5,000 mark.
The observed lower-highs and lower-lows pattern and the downward sloping 5-day and 10-day MAs indicate a bearish setup.
The chart also shows a bearish crossover between the 10-day and 50-day MAs.
Further, the relative strength index is below 50.00, but holding well above 30.00, indicating enough room for a sell-off towards $7,000.
Acceptance below the 50-week MA, currently seen at $7,620, would only bolster the already bearish daily chart technicals and increase the odds of the bearish five-month/10-month MA crossover.
In such a case, the 5-month MA will cross the 10-month MA from above, signaling a bearish crossover and opening doors for a drop to $5,000.
Bullish scenario: A solid rebound from the 50-week MA at $7,620 and a convincing break above $8,644 would signal a bullish reversal.
Bitcoin Closing on Long-Term Bear Indicator Not Seen Since 2014
Published on May 23, 2018
by Coindesk | Published on Coinage
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