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Following the incredibly bearish selloff witnessed by Bitcoin and the aggregated crypto market yesterday, buyers have stepped up and supported the markets, allowing BTC and most other altcoins to put some distance between their recent lows.
The market’s ability to establish some strong support above its recent lows seems to suggest that the ongoing selloff may ultimately prove to be fleeting, as BTC is now inching back up to the $9,000 region.
In spite of this, an interesting phenomenon that is currently occurring on Bitcoin’s 6-hour candle’s volume seems to suggest that bears are still in firm control.
Bitcoin Inches Higher, But Technical Pattern Suggests Further Downside is Imminent
At the time of writing, Bitcoin is trading up just under 2% at its current price of $8,850, which marks a notable climb from recent lows of $8,500 that were set at the bottom of yesterday’s intense selloff.
This ongoing downtrend was first sparked this past Sunday when Bitcoin faced a strong rejection at $10,000, which subsequently led the cryptocurrency to plummet to its key support at $9,500.
The drop below this level catalyzed a sharp downwards movement that sent shockwaves throughout the aggregated market and led the crypto to confirm a highly bearish technical pattern.
Veteran trader Peter Brandt spoke about this technical pattern in a recent tweet, pointing to a chart showing that BTC could plummet towards its support below $8,000 due to a bear-favoring head and shoulders pattern that it formed.
“The fact that BTC could not rally in the face of the advance by Gold prices and drop in equities was a tell,” he noted.
The fact that BTC could not rally in the face of the advance by Gold prices and drop in equities was a "tell" pic.twitter.com/GpCiXjB5cD
— Peter Brandt (@PeterLBrandt) February 26, 2020
This Volume Trend May Show That Bears are In Control
The head and shoulders pattern that Bitcoin recently confirmed isn’t the only factor counting against the crypto’s bulls at the moment, as an interesting volume trend seems to suggest bears are currently in firm control.
Big Chonis, another popular crypto analyst, spoke about this in a recent tweet, pointing to a chart showing that BTC’s previous 6-hour candle closed the day with high selling volume.
“BTC I don’t like how this last 6hr candle is closing out the day with highest volume,” he explained.
$BTC I don’t like how this last 6hr candle is closing out the day with highest volume #bitcoin pic.twitter.com/uh9dCnlcQt
— BIG Chonis (@BigChonis) February 27, 2020
Unless bulls are able to decisively recapture $9,000 in the coming several hours, it is possible that Bitcoin will see further downside, which could be driven by its weak technical situation and growing selling volume.
Featured image from Shutterstock.
