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Bitcoin Rejected Lower, Expect More Downside

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:

BTC downside risk posted on Twitter

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:

2017-09-21_BTCUSD

Bitcoin capped below $4150 resistance

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:

2017-09-21_BTCUSDLower

BTCUSD heading lower

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.

Strategy

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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