The bad news is bitcoin looks like it’s headed lower.
The good news is a decline from here will give bitcoin bulls a chance to buy at lower prices.
The last time we looked at the King of Cryptocurrencies was about one month ago.
Back then, Market Minute analyst Eric Shamilov wrote that bitcoin had reached his downside target. But since the move happened over a weekend, most folks probably didn’t get a chance to buy it below $46,000.
Well, it looks like we may get a second chance. In fact, it looks like we may soon be able to buy bitcoin quite a bit lower.
Take a look at this chart…
Bitcoin has lost about 30% of its value over the past two months.
That decline has pushed the cryptocurrency below the three various moving averages we follow (the blue, red, and green lines).
And, those moving averages are now stacked in a bearish formation with the short-term 9- and 20-day exponential moving averages (red and green lines) below the intermediate-term 50-day moving average (blue line).
So, all of those moving averages now offer resistance on any rally attempt.
This chart looks bearish for the short term.
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Bitcoin is sitting right on support at $46,000. It has tested this level several times over the past month. So far, support has held.
But, the bounces have been weak…
Bitcoin just hasn’t been able to climb back above any of its moving average lines. And, with those moving averages stacked in a bearish formation, this increases the likelihood that support will eventually fail.
If that happens, bitcoin is most likely headed towards its late-September low near $42,000. A really strong decline could see the King of Crypto test the $38,000 level.
Traders who missed the chance to buy bitcoin last month when it tumbled to $42,000 late on a Friday night (or rather, early on a Saturday morning) should hold out a little while longer and see if the cryptocurrency loses support in the days ahead.
We may soon have a chance to buy it even cheaper in a couple of weeks.
Best regards and good trading,
Jeff Clark
Reader Mailbag
Do you think now’s a good time to get in on low bitcoin prices, or do you think it will go even lower?
Let us know your thoughts – and any questions you have – at [email protected].