- Bitcoin forms the second pennant pattern in two days suggesting further losses are inevitable.
- Most cryptocurrency analysts including Forbes’ Naeem Aslam Bitcoin downtrend is far from over.
Bitcoin price is struggling to stay afloat at $10,000. However, the bounced from the support at $7,750 has remained pivotal at the same level ($8,000). The bears’ grip tightened following the flash drop on Tuesday. There was an immediate attempt to correct above $8,800 but bulls ran out of the energy to sustain the growth. The reversal under $8,500 culminated in losses below the critical $8,000.
Yesterday’s drop comes after Bitcoin price consolidation a pennant pattern gave way for the losses experienced. Meanwhile, a second short-term pennant pattern on the hourly chart hints another slide that may retest $7,750 and even correct lower to $7,500.
BTC/USD 1-hour chart
From a technical perspective, the Bitcoin has a higher risk of making lower corrections in the short-term. First, the price is below the moving averages whereby the 100 MA one-hour is currently at $8,800 while the 50 MA is struggling to hold at $9,421. The gap between these two MAs clearly shows that the sellers have the upper hand.
Consequently, recovery is visible with the moving average convergence divergence (MACD) shows that the influence the bears on the price is gradually going away. However, developing negative divergence signals Bitcoin price retreat in tandem with the above-mentioned pennant pattern reaction.
Most analysts, myself included are not convinced that Bitcoin downside correction is over. The gravitating prices must seek a credible bottom which will give way for fresh demand and convince buyers that recovery is possible. Forbes contributor and analyst Naeem Aslam in his recent tweet said that Bitcoin is likely to succumb to its biggest drop since November 2018.
#Bitcoin on track to record the BIGGEST weekly DROP since Nov 2018
A mean reversion trade is on the cards pic.twitter.com/zbHf5nrIgM
— Naeem Aslam (@NaeemAslam23) September 27, 2019
Bitcoin Key Technical Levels
Spot rate: $7,960
Relative change: -80