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Is a Bear Flag Forming for Bitcoin’s Price After a Bearish Week?

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Bitcoin ended the week on an extremely bearish note with a 2018 low formed on Friday around $3200. The price has since recovered to around $3400, but the prospects look dim from here.

The price has been trading sideways since the drop. The longer it trades sideways, the more likely a bear flag is being formed. A bear flag is where price undergoes a drop and trades sideways or in a range before dropping significantly to the downside again. The sideways price action we are seeing increases the likelihood that the next significant movement for Bitcoin will be to the downside.

Yesterday’s candle formed a Doji and today’s candle so far has also been forming a Doji. A Doji is a candle where the open is around the same point as the close and represents indecision from traders. Traders are likely shocked that cryptocurrencies are trading at such low valuations but also afraid to drive price up after the extremely bearish conditions being seen.

The next key support level to monitor is $3000 for Bitcoin. $3000 is both a key psychological point for Bitcoin and has been an area of important trading activity in the past. With the total market cap for Bitcoin trading around $110 Billion, a decrease in Bitcoin to $3000 would likely see the entire market cap for cryptocurrencies dropping below $100 Billion. This would potentially trigger a sharp sell-off across the market.

Bitcoin Daily Chart – Source: TradingView.com

Key Takeaways:

  • Bitcoin ends the week on an extremely bearish note dropping to $3200.
  • Bitcoin sets up for a bear flag pattern as it trades sideways. More likely that the next significant move will be to the downside.
  • Next support level to monitor for Bitcoin is $3000. A drop to may bring the entire market cap below $100 Billion resulting in a sharp sell-off.

Is a Bear Flag Forming for Bitcoin’s Price After a Bearish Week? was originally found on [blokt] – Blockchain, Bitcoin & Cryptocurrency News.