Bitcoin finally finding a direction
And so with yesterday's stock massacre cryptocurrency followed as well, wiping overall 10% or $13 bln market value. The price recently reached the top line of the Bearish wedge and with the breakout today, the Bears took control, playing out a bearish flag configuration that was built for a couple of days, which was frustrating for the market participants. The price again is trying to dip through the marked buy zone and again we ask ourselves is it going to hold? Time will tell. RSI falls under level 50, which indicates that a down move is imminent.
We are observing a long-term downtrend for the cryptocurrency and currently, we are crawling around the top line of the trend as well.
First scenario: Price reverses from the buy zone, breaches and tests the line successfully, then tests the 50 (red) and 200 (blue) moving averages successfully and a new uptrend starts where we can start placing buy positions and build them gradually lifting the stop loss.
Second scenario: Price breaches the buy zone, tests and closes under. This is in regards to the bottom line of the huge triangle, so if this event occurs we will see the start of a new sell-off and a proper continuation of the downtrend. Here we can think of starting to arrange some shorts and go with the trend.
Worsening in fundamentals and sentiment for now keeps the prices of crypto under pressure.