Bitcoin is now in one of the most bearish times ever. However, the crypto currency that has been able to withstand all market scandals quite well is now facing even worse news. It has previously seen several consecutively red closings, which have confirmed its entry into a bearish market. This time, however, the digital asset seems to be ready for a new record. However, the outcome is not good.
Seven Red Candles
Anybody who has followed the cryptocurrency market in recent times knows that Bitcoin is seeing several consecutive red closes. The digital asset’s history of marking bearish tendencies like this and still winning has made it not cause for concern. After the crypto’s 7th consecutive close in red, this trend would be unrivalled.
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This is the first ever time bitcoin is marking a new trend. But what the seven consecutive red candle mean for bitcoin is perhaps more significant. With the digital asset still being a seller’s market, a close like this could trigger even more sell-offs as investors worry about the future of the coin in the short term.
Additionally, the chart could show that more downtrends are possible with all of these red candles. One example is the 2014 bear markets, in which bitcoin saw four consecutive closes that were red. After that, there was only one green close. This would eventually lead to a much more devastating downtrend. If bitcoin follows the 2014 move, then an additional plunge below $30,000 could be possible.
BTC drops to $29,500| Source: BTCUSD on TradingView.com
Bitcoin is not always bad
Seven consecutive red closes may paint a bearish image, but this is not always the truth. As is well known, the digital asset records the strongest bearish patterns just before the recovery. A tremendous recovery is possible.
In August 2018, the market saw six consecutive red closings. It was expected that the market would suffer more losses as it had entered a prolonged bear market. The digital asset would record five consecutive green closes, which proved to be false.
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Although this wasn’t the beginning of the next bullish market, it was a sign that these tendencies can signal more downtrends in the future, as well as a possible precursor to a strong recovery. Bitcoin is expected to rise this time round as it broke above $30,000 but has had trouble staying above that point.
BTC prices are trending at $29,600 as of the writing of this post. Although it is slightly higher that its 5-day simple moving mean, this indicator continues to indicate bearish trend across all other indicators.
Featured image by Cryptonaute. Chart at TradingView.com