Bitcoin continues to extend it losses today, as the #1 asset unravels a further 6.59% against the US dollar. On the 4-hour chart we can see worrying signs that the 2018 bear market could be about to repeat itself.
BTC/USD 4-Hour Chart
On the 4-hour BTC/USD chart we can see that the price 00 is struggling to print a higher high after correcting from its YTD-peak of $13,850, on June 26.
Right now, the latest reaction low appears to have picked up along a strong sideways support between the $10,850 and $10,600 levels, which was a particularly strong foothold for BTC buyers during the end of Q2. If bullish traders can defend this support, we could expect a new upside recovery launch over the rest of this week.
If it fails however, it is likely that panic selling will exacerbate bitcoin’s decline, and test the strength of the psychological $10,000 support below.
Looking at the MACD indicator we can see that selling volume is starting to decrease over this time period, however the 12MA still has yet to bullishly converge above the 26MA to convince us that a new uptrend is starting.
The RSI remains uncertain, and has pushed sideways as neither buyers nor sellers appear to have taken full control of the asset.
For now, we will need to wait and see where the daily close finishes to see if BTC bulls still have enough fight in them to push back against the mounting selling pressure.
It’s only when we compare the 4-hour and daily BTC/USD price actions, that we really see cause for concern. As you can clearly make out, the trends on both charts are very similar, and show a clear spiking uptrend followed by two smaller peaks that both retrace back to a lateral support.
The latter chart, which shows the progression of last year’s tragic bear market, concluded with a bearish descending triangle breakout which sent Bitcoin reeling 50% over 30 days.
Looking at the 4-hour chart above, we can see that BTC has just pulled back from its second peak and is already starting to head beneath the main support region, as it did so on the daily chart last year.
Assuming the price action continues to follow in its previous footsteps, we could expect to see the asset continue to print lower highs until it reaches maximum consolidation inside another descending triangle pattern.
From there, we would anticipate for BTC to break bearish through the main support and plummet towards lower levels.
Where do you think Bitcoin is headed over the rest of this week? Let us know your thoughts in the comment section below!
Images courtesy of Tradingview, Shutterstock