Crypto market looks damaged
Last week, I ignored the bearish flag on the 4-hour chart, waiting for a rally up to 8000 that didn’t happen. Currently, the crypto market looks seriously damaged with more regulations coming and some US tax issues.
Bearish flag on the 4-hour chart
In my opinion, the near feature doesn’t look very bright, especially for Bitcoin and BCH (Bitcoin Cash), which supporters just keep jiving on twitter. I am not sure who is right and who is wrong, but I suppose some people made outstanding profits in USD on the BCH rally last year. However, in 2018, the cryptocurrencies are moving mostly in one direction: south.
Unlike other traders, I simply don’t see buying power right now that will push Bitcoin higher after this big drop on Monday. It now looks like a bearish flag patter. Comparing that big red candle with the following green ones tells you all. The bulls look frightened, and I don’t see them fighting the bears any time soon.
As I mentioned in my previous analysis, the long-term view remains bearish; any drop below 6800 would signal more selling orders are coming. I would short Bitcoin with stops at 7200, targeting the 6000 level.
In early February, we witnessed Bitcoin dropping to that level, and sooner or later, I would expect it to happen again.