Last week we asked, “Is Bitcoin Gearing Up for a Year-End Rally?”
We got our answer on Wednesday. The market said, “NO!”
Bitcoin broke down from its consolidating triangle pattern. And all that energy I thought was being stored up for a rally got spent pushing bitcoin in the opposite direction. Here’s the updated chart…
Bitcoin broke down from its consolidating triangle pattern. It dropped 15% in one day. And it’s now testing support near $5,250 per coin.
This chart has suffered significant damage. Momentum indicators, like the Relative Strength Index (RSI) and the Commodity Channel Index (CCI) are more oversold now than they have been all year. This condition might help bitcoin bounce back a bit from here in the short term.
Let’s hope that happens. Because if the $5,250 level doesn’t hold, then the next support line is down around $4,300.
So… does this wipe out the chance of a year-end rally for the leader of the cryptocurrencies?
Yes, it probably does.
Unless bitcoin can recover immediately and get back above $6,000 – like today – then there’s not much hope for a year-end rally.
I have seen charts like this break down, flush out the last of the selling pressure, and then immediately reverse. So, let’s not rule out that possibility. But, if a reversal is going to happen then it needs to happen today. Bitcoin needs to rally back inside its triangle pattern – and maybe even press above the triangle in order to repair the damage to this chart.
That’s probably wishful thinking. Given the severity of Wednesday’s decline, it looks like the breakdown is for real.
Bitcoin now needs to hold onto support at $5,250 and spend some time chopping back and forth in order to build up energy for a new rally phase.
That’s probably going to take some time.
Best regards and good trading,
Jeff Clark
Editor’s note: As you’ve likely noticed over the past couple weeks, the Market Minute now publishes only on Mondays, Wednesdays, and Fridays. This shakeup in the schedule is for good reason… It’s so Jeff and the team can focus on a brand-new project.
You may have seen a few updates in your inbox from Jeff about the program he’s considering launching. We’re still working out the details on this “Mastermind”… and we wanted to thank you for your feedback and thoughts on this unique online classroom-style course.
(If you haven’t already, please take this two-minute survey. It’ll help Jeff understand exactly what you’re looking for out of this project.)
Keep an eye on your inbox over the next few weeks for updates… and to learn how you can get involved.
Reader Mailbag
In today’s mailbag, one Delta Report subscriber responds to Jeff’s new idea…
Jeff, Good afternoon. Please think about continuing with your Mastermind group. What you have learned about trading is much too valuable not to share.
You could also save these sessions to share with your family. Looking forward to learning more from you.
– Glenn
What are your thoughts on Jeff’s potential online classroom? Would you participate?
And as always, send any other trading questions, stories, or suggestions to feedback@jeffclarktrader.com.