Bitcoin Price: 2 Key Indicators Hint that a Bear Market Is in the Cards
Bitcoin price continues to implode as bulls loose hold of multiple price supports and crypto trading halts on the arrival of China’s Golden Week holiday.
Last week was a tough week for Bitcoin (BTC) as sentiment shifted from bullish to bearish after the price fell from just under $10,000 to below $8,000 in a matter of hours on Sept. 24. After a brief bounce, Bitcoin hovered around $8,400 for 48-hours before the final drop to $7,740 came.
Weekly Crypto Market Performance. Source: Coin360.com
However, the main stand out tweet came from CNBC Crypto Trader host Ran Neuner who boasted:
“I’m a member of multiple Crypto chats/WhatsApp groups (none paid)- Some of these chats have the biggest whales and crypto names in the market... and not a single person has any idea what happened today!”
Volatility was expected
As previously mentioned, this week’s move had already started playing out when the Moving Average Convergence Divergence (MACD) on the weekly chart crossed bearishly back in August.
The last time this happened after a parabolic run was just before the bear market of 2018 and any person with a substantial position in Bitcoin would have have been aware of this. Newer investors and moonboys probably were not expecting this week’s downside break, but the fact that we’ve seen this setup before leads one to question the motive of Ran’s tweet.
BTC USD 4 hour chart. Source: TradingView
The Bollinger Band indicator shows the upper and lower bands are tightening, which has led the support and resistance range to fall to between $8,300 and $7,900. As the 4-hour close approaches traders can only anxiously wait to see whether it’s an upside or downside break.
It’s worth noting that Bitcoin has broken support nearly every day this week however, the last 2 days Bitcoin has been rejected. This final candle could be the bounce the bulls have been waiting for.
BTC USD 1 day chart. Source: TradingView
If Bitcoin fails to bounce before the close of the weekly candle, it can be surmised that the medium-term future will not be good for Bitcoin and you can forget about seeing a new yearly high or an all-time high in 2019.
Bitcoin’s weekly outlook
Using the holy trinity of indicators (Bollinger Bands, Relative Strength Index, Moving Average Convergence Divergence) on the daily chart, one can start to gain a better view of what the week ahead might hold.
BTC/USD 1 Day chart. Source: TradingView
According to the BB on the daily timeframe, Bitcoin is sitting right on the support, which at the time of writing is around $7,953. This means the upside potential here is around $9,590 if the price marches towards the moving average (MA) of the BB indicator and $11,350 if we break past it.
Traders shouldn’t get too excited just yet as Bitcoin has been breaking the support all week. The support on the weekly is around $7,600 and a move below here could signal that Bitcoin is primed for another bear cycle. The monthly MA is at $7,000 and the support is as low as $2,500.
BTC/USD Monthly chart. Source: TradingView
The RSI is a mixed bag
The RSI on the daily time frame provides hope for the bulls. Currently Bitcoin is heavily oversold and sits around 18. Given that any reading under 30 is considered highly oversold, this indicator provides a bit of positive news and suggests that Bitcoin price could recover in the short term.
BTC/USD Daily RSI. Source: TradingView
Currently the weekly RSI sits at 50. This could mean that the $8,000 range Bitcoin in is now probably be where the digital asset should be.
BTC/USD Weekly RSI. Source: TradingView
The indicator provides little insight on what to expect next but it’s clear that Bitcoin price has been moving down from overbought territo