Earlier this month, Barchart’s Senior Market Strategist John Rowland, CMT, weighed in on the bearish chart signals flashing for Bitcoin (BTCUSD). At the time, Rowland wrote:
“If the price closes decisively back below the prior breakout zone, it will confirm a failed auction and open the door to a broader correction, one that could unwind months of speculative gains. For traders and investors, the risk is not in missing the next leg higher, but in ignoring the early signs of market acceptance failure that often precede a meaningful trend reversal.”
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Why is Bitcoin Crashing?
Today, Bitcoin is extending its slide amid reports of heavy ETF outflows and lower expectations for a December rate cut from the Fed. Now down more than 20% from its October peak, BTC has plunged into bear market territory.
As the benchmark cryptocurrency sells off, our top technical analyst is revisiting his outlook on Bitcoin with a new note today:
“It worked out just as designed,” writes Rowland. “Probably a little oversold in the short term, as indicated by the Bollinger Band probability.”
“However, traditional trend indicators like the Average Directional Index (ADX) and Relative Strength Index (RSI) show a strengthening trend, and Bollinger Bands on all time frames are turning out, compounded by the dreaded ‘death cross’ of the 50-day and 200-day moving average — a clear sign of more to come.”
Key Price Levels to Watch for Bitcoin
So, what should Bitcoin investors be watching next?
“For now, the $94,000 level serves as a stopgap of support,” says Rowland. However, “failure to hold a weekly close here opens the door to sub-$80K levels.”
In terms of upside potential, “We could see a dead cat bounce to the $104K level, but would need a close above the $115-116K area to become bullish again,” cautions Rowland.
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On the date of publication, Barchart Insights did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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