Bitcoin Drops After Failed Breakout
BTC/USD: Price: $7,977 | MCAP: $143 Billion | Trading Volume: $15 Billion
Why we were intrigued:
Bitcoin was trading well above $8,200 on Monday with few observers cheering the top cryptocurrency's move above the 20-day average.
The break above the key average, however, lacked volume support. Also, the double bottom breakout, confirmed on Oct. 11, had failed over the weekend. Failed breakouts are powerful bearish reversal signals, as noted by @NicTrades.
Further, the daily chart indicators maintained bearish stance despite BTC's move above the 20-day MA. The bearish case for a drop below $8,000 was discussed on Monday in the article titled "Bitcoin Faces Drop Below $8,000 Despite Beating Price Resistance."
As expected, BTC fell below $8,000 on Wednesday and hit a low of $7,811 in the early European trading hours today.
Looking forward, the cryptocurrency could carve out a major bottom near $7,400, as the 50- and 200-day moving average are teasing a death cross, a lagging indicator, which trapped sellers on the wrong side of the market in 21015 and 2018.
Read: Looming Death Cross Suggests Bitcoin May Be Nearing Price Bottom Analysis
The Result
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