Bearish signals are appearing on the daily chart

Bitcoin has been trading around the 50-day SMA for the past three days. As long as it stays below $30,000, prospects of more downside are real, especially as MACD performed a bearish crossover through the midpoint on the daily chart, which is a highly bearish development. Nonetheless, we would like to note that we are still missing confirmation from DM+ and DM-, which began to diverge again after nearly completing a bearish crossover. In our opinion, the current short-term outlook is quite uncertain. Therefore, we will continue monitoring the 50-day SMA and its ability to stop the selling pressure. To bolster the bearish odds for the short term, we would like to see Bitcoin break below its Monday low at $28,842. In addition to that, we would like to see DM+ and DM- converge on the daily time frame. As for RSI, MACD, and Stochastic, we would like those to continue developing bearish structures (again, on the daily time frame). Contrarily, to support the odds that the selloff is coming to a halt, we would like to see Bitcoin rise above $30,000 and maintain solid ground above this level (without dipping below it for at least a few days).

Illustration 1.01

Illustration 1.01 displays the daily chart of BTCUSD and 50-day SMA.

Illustration 1.02

The picture above shows the daily graph of MACD. The yellow arrow indicates a bearish crossover through the midpoint.

Technical analysis gauge
Daily time frame = Bearish
Weekly time frame = Neutral
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.

Comment:

The number of wallets with balances exceeding 100 or 1000 Bitcoins remained relatively flat in the past few days, suggesting that there still is not much buying activity among large speculators. As a result, there is still a possibility for Bitcoin to continue lower, likely below $28,000. If it manages to get there, we will reassess our views.