Bitcoin Price Forecast: Signs of Weakness Emerge, Bearish Sentiment Grows

FXEmpire.com -

Bitcoin continues to show signs of weakening, and it may have only just begun. Last Friday Bitcoin triggered a failure of bull wedge breakout as the bottom boundary line of the pattern was broken. Further weakness triggered with a drop below the orange 50-Day MA.

Bitcoin had stayed above that line since February 7. In addition, there have been three daily closes below the 50-Day line and today will likely be the fourth. This confirms increasing bearish sentiment that likely will lead to a test of support at lower prices. Moreover, although it is probably difficult to see, the blue 8-Day MA began to cross below the 50-Day line today, further pointing to a correction.

First Lower Target at 56,159

If the prior swing low and bottom of the pennant at 60,771 is broken to the downside, the 50% retracement at 56,159 becomes a target. That target is strengthened by the fact that a falling extended ABCD pattern, shown in red on the chart, also points to the same price. When two indicators point to the same price it provides a stronger clue.

At a price of 56,159 the CD decline of the ABCD pattern will be 127.2%, a Fibonacci ratio, of the AB decline. Bearish confirmation can be seen in the continuation of the decline in the relative strength index (RSI). A lower target utilizing the 161.8% Fibonacci ratio highlights a target around 51,639, which is close to the 61.8% retracement at 51,999.

Correction is Still in Early Stages

Since Bitcoin failed to progress higher the chance for a bullish continuation prior to a deeper retracement has diminished. Therefore, advances into resistance areas are likely to be met with increased selling pressure rather than an eventual breakout to new highs. Further retracement and/or consolidation prior to a move higher will be health for the bull trend. Gains need to be digested to clear the way for the next rally. And that will likely take a little time.

Nevertheless, a decisive breakout above Monday’s high of 66,929 will provide a sign of strength. Further still on a rally above Saturday’s high of 69,100. However, Bitcoin will be rising into a range of potential resistance and likely will find it.

For a look at all of today’s economic events, check out our economic calendar.

This article was originally posted on FX Empire

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