It finally happened…
Oh sure, it took a little longer than we thought it would. But, bitcoin has made its big move – to the downside.
The “King of Cryptocurrencies” was trading at $10,325 per coin six weeks ago. On Friday, one bitcoin cost “just” $8,265. That’s about a 20% drop – which should qualify as an “explosive move” in anybody’s book.
Now, many traders might be wondering, “Is it time to buy?”
My answer is… not yet. The price of bitcoin has fallen far enough, fast enough, that it could certainly bounce from here at any moment. But, we don’t quite have the conditions in place for a sustainable rally. It looks to me like any short-term bounce in bitcoin is going to be short-lived. And, it will likely be even lower before it’s ready to make any serious attempt to rally.
Take a look at this chart…
Following the decline at the end of September, both the MACD and RSI momentum indicators at the bottom of the chart had dipped into oversold territory. But, they were not showing any positive divergence. In other words, as bitcoin dropped to a recent new low, the indicators hit recent new lows as well. This usually indicates that the current downtrend is strong and is likely to continue.
The indicators were oversold enough, though, to help fuel a short-term bounce. And that’s what we’re seeing in bitcoin right now. Conditions are oversold enough to fuel a move back up to the $9,500 level or so. That would be enough of a move to relieve the oversold conditions, and to set the stage for another decline.
It’s on that next decline that I suspect bitcoin will reach the downside target of $7,000 I wrote about in August. And, if the MACD and RSI indicators can hold above their recent lows, then we’ll have the positive divergence that often precedes a reversal of trend from bearish to bullish.
The blue dotted lines on the right side of the chart project my best guess for what could happen.
As I said, we could certainly see a quick pop higher in bitcoin over the next week or two. But, if you’re looking to buy into cryptocurrencies for something longer than just a quick trade, I think you’ll have a better chance to do so in the coming weeks.
Best regards and good trading,
Jeff Clark
P.S. I see much more than just a bear market ahead… I see the market crashing… this month.
Investors who practice the “buy-and-hold” strategy could lose everything. And while that may sound scary, for traders, it could be a chance to make a small fortune. Especially those who use the strategy I have developed over 36 years of trading…
That’s why I wanted to get this presentation out to you folks. Not only will I detail how you can make money while everyone else is losing their shirts, but I’ll tell you the exact date I think the market might crash.
But, this presentation gets taken down tomorrow night. So you’ll want to act fast. To learn how you could pocket your small fortune when the market crashes, read on here.
