Is today’s action in BTC showing signs of bearish reversal?

Bitcoin futures are trading up $200 (2.15%) on the day but down about $300 on the week, in today’s report we will go over were we believe BTC futures will go over the next week.

Yesterday’s break below the support trend line for the first time since hitting the lows at $4,220 back in mid-March didn’t come with a spike in volume and made a valiant attempt to recover back above it so we did not see any solid chart damage. That changed today even though we had gains on the day the picture drawn on the charts is a bearish one and confirms yesterday’s action did indeed cause chart damage. The two clear cut reasons in making that claim are as follows. First, the fact that the bulls were unable to move the market back into the channel and above the support line even on an intra-day basis illustrates that it has now become resistance rather than support. Secondly, today was accompanied by a spike in volume and since mid-March there was only one spike in volume that didn’t occur along with a higher price than the last spike.

What About The Golden Cross?

We spoke about last week that a golden cross was imminent and how the last and actually only occurrence of this bullish signal happened to be almost precisely a year prior and lead to a $7,000 price advance. Furthermore if we look at the candlesticks immediately following the prior golden cross between the 50 and 200-day moving averages the next day there was a huge drop that touched upon a support level before recovering somewhat ending the day $800 lower. This time we saw the same scenario as the day following the golden cross (Thursday) we had a large drop in pricing that touched upon the .78%% retracement from 2019’s highs to this year’s lows before recovering somewhat ending the day $700 lower. Also we have the 100-day M.A. about to cross above the 200-day M.A. which would put all the major moving averages in a fully bullish formation. The last time this occurred the following candle gapped to the upside, opening $500 higher and closing nearly $1,000 higher on from the previous candle.

So although the short term picture is depicting further sideways or downside movement in the next week possibly going to the level of $8,500 we continue to see all the makings of a continued and possibly accelerated rally in the coming months.