Bitcoin capped below $4150, breaking down
Yesterday we highlighted the strong resistance facing Bitcoin at 4150 and advised that the risk was to the downside:
The graph associated with this tweet presented that Bitcoin price has broken its long term uptrend that started at $2,000, then become capped below a descending trend line, and finally broke below the “horizontal” support that has been capping the price in the $4,150 area:
Expect more downside on Bitcoin
The wait has not been too long for Bitcoin (and most other crypto-currencies) to confirm its bearish orientation as the configuration is a typical break-and-retest sequence of the “horizontal” trend line:
This type of behavior has typically strong bearish implications and from there the odds are now heavily in favor of a continuation of the downtrend towards the $3,000 area.
This downtrend could be exploited to open long term positions and to accumulate Bitcoins but it is premature to identify the level from which a reversal of the down trend could happen.
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