While this price action just transpired, many analysts believe it’s time to pay close attention to the charts.
Key Bitcoin Level To Watch is $5,800
The key level to watch for Bitcoin moving forward is $5,800, approximately where the 200-week moving average sits as of the time of this article’s writing.
As explained in a previous NewsBTC post, this specific simple moving average has immense importance to traders, for it marked Bitcoin’s exact bottom in December of 2018 and also coincided with bottoms in 2015. As Chris Burniske of Placeholder capital once wrote:
“As someone recently reminded me, in a 2018 interview with CNBC I stated the real capitulation starts if we break the 200 week MA. We did not break the 200 week MA in 2018 / 2019 – it provided the perfect bounce for Bitcoin. But now that we broke and closed last week below $5500, what was once support becomes resistance.”
The cryptocurrency posting a weekly close (four hours as of the time of this article’s publishing) under this key support may suggest that there is more pain to come for the Bitcoin price.
Bearish Factors Persist
Unfortunately for bulls, there are a number of bearish factors that could increase the chances Bitcoin closes its ongoing weekly candle under the aforementioned key support.
A top crypto trader recently remarked Bitcoin’s daily chart is flashing three harrowing signs at the moment:
The Tom Demark Sequential, which called Bitcoin’s 2019 top at $14,000 and the bottom at $6,400, recently flashed a green “9” candle, suggesting a reversal is imminent.
The Stochastic RSI has seen a bearish crossover, suggesting downside remains.
The MACD histogram is currently declining and looks poised to turn negative within the next few days.
Furthermore, trader DonAlt, a pseudonymous analyst who called much of the recent downturn, recently shared that the price action feels “familiar,” referencing his sentiment that the current price action is mirroring that seen prior to the capitulation event on March 12th.
Why does this feel so familiar pic.twitter.com/8mSWsDucA5
— DonAlt (@CryptoDonAlt) March 27, 2020
If Bitcoin is to follow the historical price action to a T, it will make one more attempt at surmounting $7,000s in the coming days, then fall dramatically, potentially towards the local lows at $3,800.
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