Bitcoin looks like it could be shaping up for the kind of price action that separates the weak hands from HODLers. /BTC futures were down almost 6% yesterday for a year-to-date loss of about 9% as of yesterday’s close and -37% off the yearly highs, with several noteworthy technical developments yesterday alone. The cryptocurrency futures had a big close below the 252-Day Exponential Moving Average yesterday, which was the last of the major moving averages to look toward for support after falling below most of the others during December.
The dip also took /BTC below the 45,000 level, which often served as a point of support and resistance. Other things that happened yesterday included a close beyond the lower Bollinger Band, which is typically viewed as bearish and suggests high volatility relative to its recent history, and a bearish MACD crossover. Meanwhile, the RSI crossed into oversold territory during the overnight session, and the Parabolic SAR also rolled over to the downside late last month.
Price has now fallen significantly below the 47,600 level, which is the yearly Volume Profile’s Point of Control representing the area of heaviest trading and thus another significant price level. All these things are typically viewed as suggesting building bearish momentum and a potential trend shift. Bullish /BTC traders now need to hold the 41,500 level, which represents the old lows from September and the yearly -1 Standard Deviation Channel.
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