Just as Bitcoin (BTC) seemed to turn over the cusp and break out of a local consolidation zone, it sharply reversed course and plunged as much as 6% (more than $300) on some cryptoasset exchanges – sending the crypto markets into disarray in classic Bitcoin form.
The dump was quickly bought up, however, and the leading crypto has at time of writing resumed its exact same faintly uptrending action. Many traders are no doubt frustrated this morning by the classic stoploss hunt. Several other large-cap cryptos, like Ethereum (ETH) and XRP took Bitcoin’s cue and performed their own dumps.
Some analysts and chartists have turned bearish with the latest movement. The critical resistance line, between about $5,340 and $5,360 depending on the exchange, was pierced and strongly rejected, which is not an encouraging reaction.
What’s more, the close of the daily price candle occurred precisely after the movement – and closed below the resistance. The closing of candles, and especially daily candles, are important indicators for traders, as closes lock in prices and indicator values and form irrevocable price history.
For continued optimism in a BTC breakout, a daily close above resistance (and thus, turned into support) would have been necessary. The breakout attempt even occurred with a decent amount of trading volume, the sort that would be required to propel the crypto out of the local market structure.
As it stands, Bitcoin is running out of time to break up, as it squeezes ever tighter into a corner. After so much upside, a break down would be neither surprising nor inappropriate. A correction down to $4,600 – at the important 200 day moving average – would be healthy, relieve the tension in the market, and lay a more solid foundation for Bitcoin to move higher.
One thing is sure, a resolution to the trend-less uncertainty will come soon.
(The views and opinions expressed here do not reflect that of CryptoGlobe.com and do not constitute financial advice. Always do your own research.)