Bearish Bitcoin Signal Could Send Bulls To Early “Grave”

Tony "The Bull" Severino

1 year ago

3 mins read

bitcoin bulls grave gravestone doji rip dead death tombstone

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Bitcoin price is pulling back from highs set earlier this week and fear is already setting in over another potential drop. Although the top cryptocurrency is bullish according to most technicals and fundamentals, last night’s daily close left a bearish signal on the BTCUSD price chart that could suggest the fear is warranted.

If the bearish candlestick signal is valid and confirms, a sharp pullback could reset the recent rally almost completely. Here is a closer look at the potential “gravestone doji” and why it could put the nail in the coffin on the latest push by crypto bulls.

Bearish Candlestick Could Mean Highs Out For Bull Rally

The fact that crypto has taken center stage in Washington is doing more to legitimize the asset class than any situation before it. Institutions that weren’t paying attention before now cannot deny its existence and staying power.

Beyond the world of politics, Bitcoin holders are climbing in numbers and the network is recovering from the hash crash and related China mining ban. A generational buy signal has returned. Technicals across the board are mostly bullish, but last night’s daily close could be a prelude to a cleansing in the market.

Although Bitcoin is bullish even on daily timeframes, the cryptocurrency could turn down again to retest support lower. How low things go would be the next question to be answered, but for now let’s examine the bearish signal left last night after the daily close.

The signal is called a gravestone doji, and it tends to appear at the height of an uptrend.

Is a gravestone doji signaling doom for crypto? | Source: BTCUSDT on TradingView.com

RIP: Bitcoin Daily Candle Forms Deadly Gravestone Doji

According to Investopedia, a gravestone doji “is a bearish reversal candlestick pattern that is formed when the open, low, and closing prices are all near each other with a long upper shadow” or wick. The long wick left behind shows that the entire bullish advanced was wiped out by bears, which tends to indicate that a downtrend is coming.

It is also a signal to take profits on a bullish trade, and those who bought support at $30,000 could be taking some gains off the table given the resistance level here.

The gravestone doji is notorious for “reliability issues” due to poor pattern recognition. For example, any lower wick must be extremely small and the pattern isn’t confirmed until the next candle. At that point traders begin to enter or close positions, which could be too late depending on the strength of the reversal.

The gravestone doji is most reliable with another confirmation, and on daily timeframes there are other signs of short-term exhaustion. Late longs who FOMOed into Bitcoin after the bounce at $30,000 could be run before any further move to the upside, as the market retests support levels since left behind.

Follow @TonySpilotroBTC on Twitter or via the TonyTradesBTC Telegram. Content is educational and should not be considered investment advice.

Featured image from iStockPhoto, Charts from TradingView.com

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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