Bitcoin has fallen again during trading on Monday, reaching down to the $6300 level. We continue to see support come into the market at the $6000 handle, but every time we rally we only fall from an even lower level. We are getting close to the apex of the descending triangle, so we need to make a decision soon as to whether we are going to break down or turn around and rally significantly. I think the market will continue to be bearish in general, but I am the first to admit that if we break above the downtrend line, that should send the market higher, perhaps reaching towards the $7500 level, followed by the $8250 level.
The alternate scenario, and the one that I think that it’s more likely, is that we finally break down below the $5800 handle. Once we do, that should open the door to the $5000 handle initially. I think we probably break down below there as well as that will more than likely only be psychological support. The easiest trade by far has been to simply sell rallies every time we get close to the downtrend line. This is one of those trades that you simply take until it stops working. I would never think this, it’s just obvious that bitcoin is in serious trouble.
Unfortunately, there’s something about the cult of personality when it comes to crypto currencies that seems to cause a lot of financial pain. I pose this question yet again, “if this were chart of ANYTHING ELSE, would you still be a buyer?” I’m not saying that this market can’t turn around to go higher, but quite frankly if that’s the way you look at charts, you may want to consider another vocation as trading will be for you. Odds are that the descending triangle triggers more selling for the longer-term. However, we react to what the market does, not anticipate it.
