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Crypto Analyst: Bitcoin Bull Rally is Over if Trendline Breaks

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Bitcoin has been on a bull run since the start of 2019, after bottoming in December 2019. Momentum picked up with a $1,000 candle in April and the crypto asset was off to the races ever since.

But now the race appears to be coming to an end, and Bitcoin could cross the finish line soon with a break of a multi-month trendline that has been supporting Bitcoin price thus far and preventing the crypto asset from falling below $10,000.

Bulls In Trouble if Multi-Month Bitcoin Trendline Breaks

Following April’s $1,000 candle in a matter of an hour that set off a domino effect of crushing altcoins and causing Bitcoin to go parabolic, the crypto asset experienced only a few small corrections before breaking back above the important FOMO trigger level of $10,000 where it’s been for the last few months.

One of those minor corrections involved a test of support at $7,500. From there, a trendline was born that yes yet to break, despite three or four tests of it as support. Bitcoin price is currently just above that trendline, and a clean break below it could spell disaster.

In fact, one crypto analyst says that a break of this important trendline “means it’s all over” for bulls. A strong break below could cause Bitcoin to retest the horizontal support at $7,500 where the trendline was born from.

The bottom trendline is also the bottom of a symmetrical triangle that’s formed over the last few months after Bitcoin price topped out at $13,800. Since then it has bounced back and forth between peak and trough, forming the geometrical chart pattern.

Symmetrical triangles are typically continuation patterns but can break up or down. Because Bitcoin price is currently at the bottom of the formation and bottom of the important multi-month trendline that has supported price from falling further thus far, a breakdown is likely unless bulls can make a strong push toward the top of the triangle, and break above around $11,750 and close a daily candle.

Beyond the break of the trendline, a bearish breakdown from here could cause widespread panic across the already shaken crypto market, which is sitting at its lowest level on the fear and greed index in the history of the metric.

The market is already fearful after altcoins have fallen so significantly relative to their BTC ratios. A drop in Bitcoin could either cause altcoins to rally, or further drag down their USD values if they fall further. All this depends on what Bitcoin does from here, and the entire market will be watching and waiting to see what happens next.

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Bitcoin (BTC) Cannot Trade Sideways For Long

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Bitcoin (BTC) made a big move to the downside after we last talked about it on Friday but in the days that followed it has practically traded sideways. However, now it has run into a key trend line resistance and is once again on the verge of a sharp decline. The last time this happened, we saw the price decline massively and if the same happens again then we are looking at BTC/USD declining towards the bottom of the descending triangle that we see on the daily chart. This is a bearish development for the overall market but it is in line with what is happening in other markets.

If we take a look at what is happening in the EUR/USD forex pair, we can see consistent rejections at the 50 day EMA. This has been happening for a while now and EUR/USD has failed to break past the 50 day EMA. All of this points to the strong probability of a sharp decline in this pair followed by a similar decline in BTC/USD in the near future because movements in this pair directly affect movements in Bitcoin (BTC). A quick glance at ETH/USD tells us that the Ethereum (ETH) and the rest of the altcoin market share the same outlook despite temporary bullishness. The pair has done pretty much nothing except for making big moves to then invalidate those moves. This has given traders better entry points to short sell this pair.

The daily chart for the S&P 500 (SPX) shows us that the entire time what the index has been doing is just delaying the inevitable. We have now seen a close above the 50 week EMA on the S&P 500 (SPX) but that hardly changes anything. Trend line resistance on the daily chart shows us that the index does not have much room to rally and it is only a matter of time before it begins its downtrend. We have the LTC/USD chart pointing to the same outlook. The manner of its rise and fall is quite symmetrical and it is easy to see what might follow next which is why traders that are trying to buy cryptocurrencies at this point need to exercise extreme caution.

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Bitcoin Could Soon Incur Major Volatility as Bears Gain Upper Hand

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Bitcoin (BTC) has failed to garner any significant buying pressure after facing a sharp influx of selling pressure yesterday that sent it reeling to the lower-$8,000 region – which is where it was able to find enough support to halt its drop and stabilize its price.

Analysts are now noting that multiple indicators signal that the crypto is positioned to incur notable volatility in the near-term, which could mean that the direction that BTC will trend for the coming few months will soon grow clear.

Bitcoin Drops Towards $8,300; Is a Big Movement Inbound?

At the time of writing, Bitcoin is trading down just over 1% at its current price of $8,300, which marks a notable retrace from its recent highs of $8,900 that were set last week when BTC’s bulls quickly pushed the crypto towards this price level, which is where it found significant resistance that sparked a short-term downtrend.

This downtrend was perpetuated yesterday when bears quickly pulled the rug out from beneath BTC and sent it to lows of roughly $8,100 before it rapidly climbed back towards its current price levels.

In the near-term, it is highly probable that Bitcoin and the aggregated crypto markets will soon incur notable volatility, as BTC is currently forming “spinning top candles” within the middle of its tight Bollinger Bands – both signs that a big movement is imminent.

“$BTC #Bitcoin – Todays spinning top falls right in the middle of the bands- When volatility hits we could see $7900 to the downside or $8600 to the upside, so prepare accordingly,” Big Cheds, a popular cryptocurrency analyst on Twitter, explained in a recent tweet.

Could BTC Still Target $8,600 in Near-Term?

Despite the bearish price action as of late, it is important to note that there are still analysts who anticipate an upwards movement for Bitcoin in the near-term, with Mayne explaining in a recent tweet that he believes BTC could target $8,600 next.

“$BTC: Expected a test of $8150 and we got it. Preemptively long expecting another bullish week. Will compound above the weekly open/monthly open ($8278 & $8300),” he said while pointing to the below chart.

If Mayne’s analysis does prove to be accurate and Bitcoin is able to break above $8,600, this could mark a bullish break that sparks massive volatility that favors the cryptocurrency’s bulls.

Source:newsbtc

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UK Forex Giant Launches New Bitcoin Service as Brexit Fears Grow

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UK-based FXCM Group has introduced a new bitcoin trading service right around the time when investors weigh the possibility of a hard Brexit.

The forex brokerage giant announced in a press release published on Monday that it is launching CryptoMajor. It is a basket that contains five popular cryptocurrencies – Bitcoin, Ether, XRP, Bitcoin Cash, and Litecoin – in equal proportions. CryptoMajor behaves as a single unit representing the combined value of the said assets. It means FXCM users would be able to collate and offload multiple cryptocurrencies at one go, without the need to manage each one of them independently.

Brendan Callan, the chief executive officer of FXCM, treats CryptoMajor as an ideal hedging risk management tool for retail traders. He projected the basket as a “great opportunity” for traders who want to start trading cryptocurrencies but do not want “to risk too much exposure.”

 “Trading a basket of cryptocurrencies means our users are freed from the hassle of constantly monitoring the markets,” Callan said.

Brexit Fears

FXCM’s announcement arrived on the day when Pound slipped 0.71 percent against the US dollar. The drop, in turn, came on the back of pessimism surrounding Brexit. European Union’s chief Brexit negotiator Michel Barnier said that UK Prime Minister Boris Johnson’s deal is too complicated and needs more time. That put clouds over Johnson’s promise to deliver Brexit before October 31.

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GBP/USD down 0.71% on Brexit Fears | Image credits: TradingView.com

The news erased part of the gains Pound, as well as the UK stocks, had made at the end of the last week. Strategists at ING called the downside correction a “reality check” for Brexit bulls, adding that the sterling is now under threat of a further price breakdown.

“GBP gains have, in part, been caused by meaningful short speculative positioning, exaggerating the effect of the news flow,” they explained.

Holger Schmieding, the chief economist of Berenberg Bank, further stressed:

“Striking a deal in time for the EU summit on 17-18 October and getting it passed by the U.K. parliament in an extraordinary Saturday session on 19 October poses a huge challenge with a highly uncertain outcome, to put it mildly. Also, the EU may need a technical extension to ratify the deal on its side anyway.”

Meanwhile, with Callan mainly confirming on the “risk” part of the bitcoin and other cryptocurrencies, it is safe to assume that FXCM is looking to make CryptoMajor an attractive alternative for CFD traders who might want to ignore Brexit-hit markets.

No Base Currency Specified

FXCM did not reveal the base currency for the CryptoMajor basket in its announcement. The brokerage, which offers three similar baskets, typically uses the US dollar as its underlying currency to value the different assets. FXCM would likely employ the dollar for the crypto basket, considering the brokerage has a presence all across the globe.

Source:newsbtc

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