Bitcoin...Possible Bear Scenario

I realize these types of posts are unpopular. That said, I do think there's a real possibility of a bearish scenario playing out over the next few days. As I outlined in my last bitcoin update, there's a clear descending triangle that's formed on the 4 hour chart as well as the MACD histogram. As it gets closer to the apex, a breakout up or down is very likely.

There are many mixed signals. Of course, most people would like to see bitcoin rise. This gives them a bias when doing technical analysis. They find all the bull signs while subconsciously ignoring the bearish signals. A case can certainly be made for a bullish break up, but in this post I want to point out the clear evidence of a possible break down.

Zooming into the 1 hour chart, we can see an almost perfect bearish pennant has formed:

This suggests a possible drop in price to come. If we zoom out slightly and try to count the prior waves, we can make a case for a continued downtrend. If this count is correct, we're just seeing the end of an ABCDE pattern, with a downtrending wave 1 to follow. This would break us down and out of the charted pennant. An initial target would be between $6,500 and $6,350.

REMEMBER...this is only 1 possibility. It's in no way a certainty. I just thought everyone needed to see the straight, non filtered evidence for a bearish scenario. There's also a great deal of bullish scenarios being floated around by others. Many of them are valid. As I said in my last update, when signals are mixed, it's often times best to wait for a breakout, up or down, before entering a position...but that's a decision each person has to make on their own.

While I'm neutral on Bitcoin in the short term, I remain VERY bullish long term. I believe Bitcoin will reach new all time highs by the end of 2018.

I hope this has been helpful. If you enjoyed this article, please let me know by following me and clicking the up-vote tab below. If you didn’t enjoy this article, let me know how I can improve and earn your vote in the future.

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Disclaimer: I am NOT a financial advisor and this is NOT financial advice. Please always do your own research and invest responsibly.

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