Bitcoin experienced a sharp decline last week due to the news that BitMEX was indicted by the U.S. CFTC.
The crypto currency fell from its highs of $10,900 to a local low of $10,400. This marked a decline of about 5%.
Since then, Bitcoin Revolution scam has been able to recover as the legacy markets appear to have risen due to the potential for further incentives and President Trump’s security.
Unfortunately, BTC could fall lower again as the asset is providing crucial short-term technical signals for a bear trend.
If so many signals occur simultaneously, this indicates that the trend of the crypto currency is declining.
In addition to the purely technical signals, the coin has formed a CME futures gap to the downtrend over the weekend.
Bitcoin forms bearish short-term signs
Bitcoin has risen by several percent since the recent lows of $10,400 – up to just under $10,800. The leading crypto currency is currently traded for $10,640 as it tries to fend off a further decline in the wake of BitMEX news.
According to one trader, the coin forms a series of declining short-term technical signals. Allegedly there are five signals indicating that Bitcoin will move down.
These signals are as follows:
Bitcoin has formed a „tombstone doji candle“ characterized by a tall wick pointing upwards. This wick is a sign that an asset has rejected an area that it tried to break into.
A Tom Denmark Sequence candle „Sell 9“ candle. „9“ sequence candles are often seen at the turning point of a trend.
Bitcoin experiences a rejection at the upper limit of an ascending triangle formed from local lows.
Declining crosses on the Stochastic Relative Strength Index and Fisher Transform indicators on the four-hour chart. These two indicators are indicative of the trend.
In addition, Bitcoin has formed a CME futures gap to the downtrend as a result of a rally over the weekend. Three-quarters of all these gaps are filled within the week in which they are formed.
Chart of the BTC price development in the last few days (since the beginning of October) with analysis of the crypto trader Crypto Hamster (@CryptoHamsterio on Twitter).
Although BTC is facing these technical signs of a downward trend, the asset has proven to be extremely resilient in recent weeks.
Bitcoin is only a few percent below its local highs, despite the three subsequent bearish messages: Trump was infected with COVID-19, BitMEX was indicted by the CFTC for derivatives and anti-money laundering concerns – and KuCoin was hacked for over $200 million in crypto-currencies.
According to analysts, the fact that BTC has nevertheless only fallen by a few percent is a good sign of the health of the market.