Bitcoin saw a sharp decline last week amid news that BitMEX was indicted by the American CFTC.
The cryptocurrency fell from its highs of $ 10,900 to a local low of $ 10,400. This marked a decrease of around 5%.
Bitcoin Code has since rallied as legacy markets have apparently risen due to the potential for further incentives and the safety of President Trump.
BTC could unfortunately fall lower again as the asset forms crucial short-term technical signals of a bear trend
If so many signals appear at the same time, it indicates that the trend of the cryptocurrency is downward.
In addition to the purely technical signals, the coin formed a CME future gap to the downward trend over the weekend.
Bitcoin is forming bearish short-term signs
Bitcoin is up a few percent since its recent lows of $ 10,400 – up to just under $ 10,800. The leading cryptocurrency is currently trading for $ 10,640 as it tries to fend off another drop in the wake of BitMEX news.
According to one trader, the coin is forming a series of bearish, short-term technical signals. Allegedly there are five signals that suggest Bitcoin will move down.
These signals are as follows:
Bitcoin has formed a “tombstone doji candle,” which is characterized by a tall, upturned wick. This wick is a sign that an asset has rejected an area it attempted to break into.
A Tom Demark sequence candle “Sell 9” candle. Sequence “9” candles are often seen at the turning point of a trend.
Bitcoin experiences a rejection at the top of an ascending triangle formed from the local lows.
Bearish crosses in the Stochastic Relative Strength Index and Fisher Transform indicators on the four-hour chart. These two indicators are indicative of the trend.
In addition, Bitcoin created a CME futures gap on the downtrend as a result of a rally over the weekend. Three quarters of all of these gaps fill within the week they are formed.
Chart of the BTC price development in the last few days (since the beginning of October) with analysis by the crypto trader Crypto Hamster (@CryptoHamsterio on Twitter). Chart from TradingView.com
While facing these technical signs of a bearish move, BTC has shown itself to be extremely resilient over the past few weeks.
Bitcoin is just a few percent below its local highs, despite the following three bearish news items: Trump caught COVID-19, BitMEX has been charged by the CFTC with derivatives and anti-money laundering concerns – and KuCoin has been charged for over $ 200 million Cryptocurrencies hacked.
According to analysts, the fact that BTC is still only down a few percent is a good sign of the health of the market.