Bitcoin ($BTC) records another lower high – are lower lows coming?

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As a seasoned researcher with over a decade of experience in the financial markets, I have learned to approach cryptocurrencies like Bitcoin with both curiosity and caution. The current situation presents an interesting conundrum: a roll-over from the all-time high or just a period of consolidation before pushing higher?

After hitting a string of successive peaks, the price of Bitcoin ($BTC) appears to be trending lower again. Is this a sign of reversal from the peak of around $100,000, or simply a phase of contraction and stockpiling before heading even higher?

Third successive downward day for Bitcoin

Over the past three days, Bitcoin’s price has been declining and currently stands about 2% lower than its opening value on Monday. This downtrend began after Bitcoin failed to reach a new peak at $98,200 on November 22, instead making a lower high. In essence, since approaching the all-time high on that date, Bitcoin’s price has been gradually decreasing.

As we move through December, there’s no sign yet of a halt in this gentle decline. Will it persist, or could the increasing presence of U.S. Spot Bitcoin ETFs, companies like Microstrategy, and other institutions that are accumulating Bitcoin for their reserves help reverse this trend and push prices back up?

Bitcoin price traverses inside triangle

In simpler terms, Bitcoin’s short-term future doesn’t seem to indicate a major drop just yet. Its price trend is like an upside-down triangle, created by successive lower highs but balanced out with higher lows.

In simpler terms, the current price drop has dipped under a significant Fibonacci level (0.382), and it’s expected to continue going down towards another important Fibonacci level (5.0). If it falls below this point, two more major Fibonacci supports (0.618 and 0.786) could potentially cushion the fall. Additionally, there’s a horizontal line that forms the bottom of the triangle, which might serve as another support level.

Glancing at the base of the graph, it appears that the Stochastic RSI is trending towards its lowest point. When both the 8-hour and 12-hour Stochastic RSIs also reach their respective low points, a rebound might be imminent; if it’s not already occurring.

Is it possible that the next rise in Bitcoin’s price could gain enough momentum to surpass the upper boundary of the triangle? Given that Bitcoin tends not to linger at the end of triangles before breaking one way or the other, we should keep an eye on whether the price reaches the top trendline once more.

As I, the researcher, observe the BTC market, if the price drops beyond the triangle’s base, it’s crucial to keep a close eye on the price movement. Should it fall below $90,700, this would mark a lower low, signaling a break in the prevailing uptrend.

Bullish hammer candle versus bearish Stochastic RSI cross down

Examining the Bitcoin (BTC) price chart on a weekly basis, it appears that following a significant sequence of three upwardly-trending candles, the price is either reversing and dropping, or accumulating for a potential increase in the future.

The key advantage for the bull right now is that last week’s candle shaped like a hammer. Typically, this pattern appears near the end of a downward price trend and suggests a reversal. But if it emerges during an uptrend, it might indicate the continuation of that upward momentum.

In simpler terms, it means one reason the market trend might continue to go down (favors the ‘bears’) is because the weekly Stochastic Relative Strength Index (RSI) has shown a change where its indicators have crossed each other in a downward direction. Typically, this kind of cross suggests that the momentum for price increases may be decreasing in the market.

As a researcher, I can’t help but notice the potential for the 75.00 level serving as a significant support point that could potentially reverse the trajectory of these two indicators. The coming weeks are crucial in determining if this is indeed the case.

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2024-12-02 14:08