Bitcoin (BTC) Price Still Looks Bearish Despite Rally to $8,200. Will Bulls Turn the Tables?

News
Sun, 01/12/2020 - 18:07
Alex Dovbnya
Sorry bulls, this is not the right time to feel complacent as Bitcoin (BTC) is yet to break out of the six-month falling channel
Cover image via www.123rf.com
Contents

After Bitcoin's impressive rally in early January, some traders can't help but feel like another major upside move could be just around the corner. However, market analyst Jacob Canfield is convinced that BTC could witness more downside pressure.  

Related
There Is 'Strong Probability' That Bitcoin (BTC) Price Touches $14,000 in 2020: Fundstrat's Tom Lee

Storm clouds hovering above Bitcoin

In his latest tweet, where he shares his unbiased view of the current market situation, Canfield points to the fact that BTC continues to make lower highs within a bear channel while the Relative Strength Index (RSI) is currently in the transition zone. Furthermore, BTC has formed its third hidden bearish divergence since August (the two previous ones were instantly followed by major price drops).      

image by @JacobCanfield

The six-month falling has is one of the strongest arguments for Bitcoin bears. Trading legend Peter Brandt claimed that the top coin could eventually drop to $5,400 in July if the $6,400 bottom doesn't hold.   

Moreover, there is no buying interest at the current level, which means that investors expect to buy more at lower prices. For comparison, a lot of buyers stepped in at $12,000 back in August. A lot of retail investors who bought the top of the 2019 rally might still be cautious to dip their toes into crypto. 

image by @J0E007

Related
Peter Schiff Mocks Bitcoin's Four Percent Price Rally: 'How Will It Ever Hit 50K?'

Bulls need more steam 

According to Canfield, BTC needs to print this weekly candle above the $8,500 level to put the bulls back in control. This would lead to an upside break of the falling channel on the weekly chart, something that BTC has yet to achieve. 

On Jan.11, BTC witnessed a strong rejection slightly above the $8,250, which makes it yet another lower high on the weekly. If this rally fizzles out like the China pump in October, the channel could eventually break downwards like during the end of the 2018 bear market when BTC tanked to $3,000.  

Still, trader Murad Mahmudov is convinced that the 53 drop from $13,888, the 2019 peak, was simply a correction in the middle of a bullish cycle. 

 

image by @MustStopMurad

Will BTC witness another correction? Share your take in the comments! 

Subscribe to U.Today on Twitter and get involved in all top daily crypto news, stories and price predictions!

About the author

Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at alex.dovbnya@u.today.

This site uses cookies for different purposes. Please set your preferences in Cookie Settings and visit our Cookie policy for more information on how and why cookies are used on this site. Click here for cookie policy