The rally in bitcoin is stopped in its tracks.
Three weeks of consolidation in bitcoin was capped by what looked like a break to the upside on Monday but it’s come nearly completely undone today with bitcoin falling $1800 to $29,940.
A nice consolidation/pennant formation was followed by an unusually long period of sideways movement, particularly given the volatility in other global markets.
Eventually, bitcoin seemed to catch a tailwind from a strong rebound in stocks, although belatedly. What’s concerning is that even with equities only down moderately (S&P 500 down 0.8% today) bitcoin has nearly given it all back.
A completely retracement would be to $29,400.
Perhaps the bulls can focus on the ‘retest of the break’ philosophy but that works better after a sideways channel.
What’s equally concerning for non-crypto traders is the bitcoin has been a good leading indicator of global market sentiment. This drop highlights the likelihood that the latest bounce is a bear market bounce rather than a bottom.