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According to one analyst, the Bitcoin (BTC) price is entering “bear” territory.
This may seem crazy, especially considering that the leading cryptocurrency is still some three times higher than it was during December’s harrowing bottom, but there is technical analysis-based evidence to suggest that BTC is in more of a precarious situation than some think.
Related Reading: Bears in Charge as Bitcoin Price at Risk of November 2018 Style Dump
The question then remains: can Bitcoin recover? And if so, how fast?
Bitcoin Price Teetering on Edge of Bear Zone
Since Bitcoin peaked at nearly $14,000 in late-June, it hasn’t been having the best of times. The cryptocurrency has collapsed all the way to $10,000, where analysts say bear pressure is building.
While some have shaken this off as “FUD”, a technical signal has accentuated that bears may currently have more control over the BTC price than optimists believe. Crypto Hamster noted that the Stochastic momentum indicator for Bitcoin’s one-week chart is at an “unprecedentedly low for a bull market”.
$BTCUSD, 1W.
Stochastic is unprecedentedly low for a bull market. Technically, entering the bear territory again.
We should've gone up long time ago.
This is why this correction is that scary.
Reasonably scary.$BTC #bitcoin pic.twitter.com/A40szZjBWi— CryptoHamster (@CryptoHamsterIO) September 23, 2019
In fact, they add, the indicator is entering a “bear territory”, entering regions not seen since 2018’s crypto winter or 2014/2015’s bear market. Hamster suggests that if historical price action is of any current relevance, Bitcoin should’ve gone back up a “long time ago”, adding that this technical reading is “reasonably scary”.
That’s not all. The Vortex Indicator, a recently-popularized technical indicator which aims to find directionality in markets, saw a bear crossover just this week. Hamster notes that this isn’t necessarily a sign of doom, but should still leave traders alarmed in case things go south.
$BTCUSD, 1W.
Vortex Indicator just made a bearish cross.
It is not necessarily a doom's sign, but still alarming. $BTC #bitcoin pic.twitter.com/PGEK9IKsmF— CryptoHamster (@CryptoHamsterIO) September 23, 2019
Related Reading: Analyst Says More People Will Buy Bitcoin as Equity Markets Climb
It’s also important to note that the key moving averages that signal whether an asset is in a bull trend or bear trend are rapidly approaching Bitcoin’s current price.
The ever-important 200-day moving average, for instance, is currently around $8,800. A sustained loss of that level, coupled with any of the other key moving average supports (21-week EMA, 50-week SMA, etc.) would really be a nail in the coffin for this bull cycle, even if it has just started.
Still Bullish, Crypto Can Recover
While these technical signals seem to be flipping at least short-term bearish, there is still evidence to suggest that Bitcoin is still embroiled in a macro bull trend. Willy Woo, as reported by this outlet previously, has said:
“Cheat sheet map of where we are in this bull market according to on-chain metrics. We’re closing up the opening act of the bull market and awaiting the middle bull market to commence,” in reference to the chart below.
Cheat sheet map of where we are in this bull market according to on-chain metrics. We're closing up the opening act of the bull market, and awaiting the middle bull market to commence. pic.twitter.com/xkmY5i605G
— Willy Woo (@willywoo) September 21, 2019
Also, as Josh Rager has pointed out that unless Bitcoin sweeps the key support of $9,400, bulls remain in control of the Bitcoin price, despite the critics asserting that the cryptocurrency is in an “echo bubble”.
Featured Image from Shutterstock
