By CCN Markets: The bitcoin price suffered a massive setback on August 28th, crashing through support at $10,000 before testing the low $9,000s.
We warned that this dump would eventually happen, and unfortunately for bulls, technical analysis reveals that the pain isn’t over yet – not even close.
The 2019 bitcoin price rally has been losing steam ever since it peaked at $13,880 on June 26th. Bulls tried to keep the momentum alive, but each attempt to rally the troops was met by heavy selling.
A quick look at the daily chart above shows that the cryptocurrency appears to have generated three lower highs. Each lower high was painted after bouncing from support of $9,600. The price action led to the formation of a bearish descending triangle.
On top of that, the uptrend support that carried the market to $13,880 has been converted into resistance. This points to the growing strength of the bears. The weak bounce to $10,955.48 on August 20th affirms this bias.
“On June 26th our Proprietary Technometer indicator warned of an overbought market and one that was needing a correction. That day, we experienced a Buying Climax (BC) on heavy volume, and then an Automatic Reaction (AR) the following week, and then a rally for a Secondary Test (ST). The Secondary Test came on lower volume when compared to the Buying Climax, which said the high of the Buying Climax would stand as resistance.”
In other words, the Wyckoff expert supports our view that bitcoin is likely to correct in the foreseeable future. In addition, Mr. Buttefield told CCN:
“Since our Technometer is at a reading of 41.82, we have no reason to believe the selling is over, as we are wanting a reading of 38 or below which would tell us the selling has possibly ran its course. So we expect a break of the $9,150 area where we will be preparing buy orders. We expect all time highs shortly thereafter.”
Todd Butterfield has been on the money on his bitcoin calls as of late. The fact that he shares our view makes us confident that the leading cryptocurrency is likely to continue sliding before resuming its uptrend – eventually.
Disclaimer: This article is intended for informational purposes only and should not be taken as investment advice.