This week, bitcoin made history when it recorded its eighth consecutive red weekly close. This first-of-its-kind streak has solidified the digital asset on one of the worst bearish trends ever. Now, even as the week is trending towards another close, the cryptocurrency has not been able to make any significant corrections, indicating that it may not be done with its bearish streak.
Bitcoin headed for the ninth red close?
As bitcoin is still trading below $30,000, it is not a long shot to speculate that the digital asset could close in the red this week as well. If it does, it will break its previous record, plunging the market into an even worse bearish trend. Nine consecutive weekly closes would prove that the bulls have largely given up control of the market, meaning the bears have room to pull the market further down.
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This, combined with increased interest rates from the Fed, has made investors feel anxious about financial investments. Thus leading them to more ‘stable’ investment options. With such money leaving the market, bitcoin has little chance of actually reversing the current trend.
Even though bitcoin is providing a safe haven from the altcoin bloodbath, it does not mean that the digital asset itself has not harmed itself. NewsBTC reported that while bitcoin has been the best performer among all the indices, the cryptocurrency is still down 24% since the beginning of the month. This drop in price means that investors are still not as bullish on the leading cryptocurrency.
BTC price falls to $28,000 | Source: BTCUSD on TradingView.com
what do the pointers say
For Bitcoin, holding above the 50-day EMA has always been a bullish indicator. This is why the current trading price of the cryptocurrency is not good news for it. For example, bitcoin is trading below its 50-day SMA by more than $9,000. For a recovery trend to consolidate, it would need to not only move above this point but also establish a significant support above the $40,000 level. This would mean that Bitcoin would have to recover 37% to achieve this.
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While this is not out of the realm of possibility, exchange flows suggest that it is very unlikely to happen. In the last 24 hours alone, BTC exchange inflows exceeded $7.5 million in outflows, indicating that the selling trend remains strong.
Unless this selling trend can be stopped and turned into an accumulation trend, a 37% recovery for Bitcoin remains out of the picture. With the extreme fear sentiment being experienced in the region, BTC is likely to slide below $25,000 before establishing support above $40,000.
Featured image from BBC, chart from TradingView.com
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