Exactly one week ago, Bitcoin managed to end its free-fall drop. On Saturday, June 18, we witnessed this sharp drop. Yet, one day later, and we saw a larger green candle. That’s a clear invalidation setup, which we discussed in the Bitcoin price outlook following last weekend’s crash.
Given the really slow decline in BTC over the last six months, we don’t expect a V-shaped recovery. Instead, the most likely outcome is a bottoming formation with a double to triple bottom, provided the recent lows hold.
The daily BTC chart says it all. In fact, we analyze the direction of the crypto market based on six distinct BTC charts in our crypto investing service. One of these is shown below, and it displays some relevant insight.
First of all, we can clearly see how BTC has been in a slow decline, as the drop since June 10 was the fastest drop since the start of the bearish trend back in December. We believe, because of this, that a V-shaped recovery is not likely. The coronavirus crash came with a fast decline and a fast recovery in the form of a true V-shaped reversal. Both situations are vastly different.
Second, the longest-term channel on the BTC chart was tested last Saturday. It did hold. A re-test of the lows of the +10-year channel should not be discounted.
Third, from a chart perspective, it was pretty fascinating to see how price got to the intersection of three hugely important trendlines, exactly on June 18. As an investor, it was scary. Chart-wise, it was fascinating. That’s the combination that matters for important reversals to be created.
Going forward, we believe that the 19-20 thousand range will be crucial. A back-test, maybe even a group of them, should not be excluded. In fact, we feel strongly about at least one back-test of the recent lows, which could be due next week.
Whatever happens in the 19-20 thousand area will be crucial for the long-term trend in BTC and crypto markets. It will also determine whether or not we can expect to see a summer rally.
See more charts and precise price points in today’s crypto alert.
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No legs at the moment. Not really clear why you think there would be.