As a seasoned analyst with over two decades of market experience under my belt, I must admit that Bitcoin’s recent bearish weekly and monthly candle closes have stirred some concerns in me. However, it’s essential to approach these situations with caution, as they often present opportunities rather than outright threats.
Bitcoin (BTC) has just suffered bearish weekly and monthly candle closes that make it hard to be optimistic for the month of September. Will Bitcoin now lead the crypto market down to much lower levels?
Monday manipulation?
On a U.S. bank holiday with Bitcoin experiencing low trading volumes and minimal real activity, Monday might witness significant price manipulation in the Bitcoin market. The potential direction of these manipulations depends on the parties involved – should manipulation occur at all.
$BTC falls out of its channel
On a closer look, over the immediate period, Bitcoin’s price has dropped from its upward trending corridor and has already confirmed this downward breakout, further expected to decline. The anticipated drop following the breakout should reach approximately $52,800.
Real danger on the weekly time frame
On the weekly timeframe, the potential risk for the Bitcoin price becomes more apparent. A candlestick pattern known as an “enveloping” can be quite significant here. This occurs when a new week’s candlestick body completely surrounds the previous one, like what we see in the chart above where the last red weekly candle has encapsulated the previous green one.
Additionally, let’s consider the weekly Stochastic RSI’s closing trend. For most of the week, it indicated a positive outlook, suggesting that a crossover would occur, resulting in a potential increase in bullish price movement. However, the downturn on Sunday caused a bearish close, which has now reversed this trend. Specifically, the fast (blue) indicator line has dropped beneath the slow (red) indicator line, signifying a potential decrease in bullish price momentum and an increase in bearish trends instead.
Is below $40,000 a possibility?
Monthly observations reveal that Bitcoin (BTC) has dropped beneath $59,000 – a significant level acting as both resistance and support on this timeframe. Could it be possible that BTC may retrace towards the lower end of the previous month’s price decline? Given that the past two months have witnessed substantial buying pressure resulting in long wicks, it appears challenging for the bears to push prices down without seeing another round of buying to counteract their efforts.
As you delve deeper into long-term chart analysis, Fibonacci levels become equally significant. By examining Fibonacci levels across the entire history of Bitcoin, it becomes evident that they provide astonishingly accurate predictions regarding potential price points.
Bitcoin has already tagged the 0.382 fibonacci, and it could come down there once again. Also, it can be seen that the most important fibonacci at 0.618 has quite a lot of concordance with support and resistance. Could it come back to this level? Of course, the possibility is always there. Is it likely to do so? Good horizontal support can be seen at $42,000, so a wick down below this to $38,000 could happen, leading to a 49% correction from the top.
Sell at your peril
Despite the current bull market, the S&P 500 has recently reached its all-time high for monthly closes. Moreover, global liquidity is increasing, with a significant flow expected towards the end of this year and continuing through much of the next. This kind of financial climate could be particularly favorable for Bitcoin. If you’re considering selling, think twice as it might not be the best move.
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2024-09-02 13:03