Bearish Bitcoin fractal with 78% success rate flashes as BTC drops below $43.5K

Fears of a prolonged selloff have been sparked by the recent drop in Bitcoin (BTC), which saw its price fall from $47,358 down to $43,178.

Independent market analyst Nunya BIZZIN highlighted a bearish fractal in Bitcoin’s weekly charts regarding its 21-week exponential moving mean (EMA).

The cryptocurrency closed below this support zone 18 times, but maintained its bullish bias only 4 times. This is evident by the vertical dotted lines in the chart below.

Daily price chart BTC/USD with its 21-week EMA. Source: Nunya Bizniz, TradingView.com

The remaining cases saw Bitcoin prices drop to below the 21-week EMA. This was despite a fake bearish breakout that occurred in August 2015, which led to a “tremendous bull market,” according the analyst.

Bitcoin’s recent dip below the wave level in May 2021 led to prices falling below $30,000 for only the second time since Jan 2021. However, the crossover didn’t lead to a complete bearish collapse. Instead, traders bought the dip at $30,000 and drove the prices up above $50,000.

Overall, however, Bitcoin prices falling below the 21-week EMA caused an extended selloff of almost 78%.

Bitcoin falls below the 21-week EMA again

Bitcoin closed at $43,178 for the week ended Sept. 26, alerting about its 19th historic decline below the 21-week EMA (which was approximately $43,502 at the weekly closing).

Although the fractals predicted a negative outcome, a closer look at the relationship between 21-week EMA (EMA) and 50-week simple movement average (SMA), indicated that a possible bearish outlook would require further validation.

This is mainly due to traders’ immediate reactions to the moving averages. This is especially true when the 20-week EMA, the green wave, closes below its 50-week SMA (theblue wave). The so-called Death Cross indicator was previously associated with further falls in the Bitcoin market.

Bitcoin price weekly chart with 20-50-MA death cross Source: TradingView.com

The BTC/USD exchange rate fell below its 21-week EMA ($8,041) during the week that ended Jan. 29, 2018. However, it retained its upside bias until its close below the blue wave. The pair eventually reached its 200-week SMA (approximately $3,187).

Similar to the death cross of 20-50 MA in March 2020, it occurred just a week before the notorious Covid-19 selloff that was led by the Covid-19-led global market crash. Bitcoin closed at its 200-week SMA ($5,512), but bounced back to new records in the sessions.

Related: JPMorgan CEO claims Bitcoin prices could rise by 10x, but he won’t purchase it

It appears that Bitcoin’s death cross between its 50-week SMA and 20-week EMA could cause the next selloff crisis. The ultimate downside target is located near the 200-week SMA (around $15,000.

The Fibonacci levels of $34,712 retracement and $27,580 could prevent Bitcoin prices from reaching the 200-week SMA.

com. You should do your research before making any investment or trading decision.
https://cointelegraph.com/news/bearish-bitcoin-fractal-with-78-success-rate-flashes-as-btc-drops-below-43-5k

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Donna Burk

Donna Burk– Business News My Name is Donna Burk and I am also the main source from the ‘Dailynewssheet.com’ of all the exclusive and most delicate visualization of the activities in the business sector. My first step towards this journey was taken in the very early years of my life. I started with an independent financial consultant. However, I only had almost 4 years of skills and experience in this market. I have always been a free personality and like to fly one place to another, to explore more and more. Moreover, this passion and craze of traveling gave me a chance to report a section for best news associations. Last but not least, I am presently working full-time as an editor.

2021's Most Anticipated Growth & Wealth-Building Opportunity

Join Thousands of Early Adopters Just Like You Who Want to Grow Capital and Truly Understand Cryptocurrency Together

Close Bitnami banner
Bitnami