Written by For those watching closely… Interesting potential trendline break of the downtrend in Bitcoin BTC.
On this daily chart above, note the potential trendline break to the upside. Could be a good time to take a flyer in Bitcoin (If and when). BTC looks to be trying to hammer out a bottom with higher lows forming a small uptrend. The down trend started in November ’21 peaking at 69000. It fell to 32933.33, a 53% crash.
This latest crash in Bitcoin is similar to what transpired last summer. In April ’21 BTC peaked at 64899 and fell to 28800 marking the low in June ’21, a 56% correction.
Two scenarios I see playing out. 1.) BTC price “balances out” in market profile theory that simply means Bitcoin trades sideways at this level for a time, building value. 2.) BTC breaks the down trendline and starts a new uptrend. The ideal way to trade it would be to buy on a back test of the trendline after breaking above it then pulling back. The buy point would be the bounce of the line. See the red arrows below.
A prudent stop loss could be entered if the price falls below the secondary uptrend line. The bearish price action could continue as it seems Bitcoin is positively correlated with the equity markets. It will be interesting to see if Crypto prices can decouple from equity price movement.