Bitcoin bulls can be looking for some not so good: technical indicators show the cryptocurrency could be entering a completely new downward trend.
The world’s biggest digital token entered the latest negative divergence pattern Thursday, in line with the Directional Movement Index, a technical momentum indicator. The index’s ADX line, which determines the strength of the craze, appears to have bottomed and has now did start to curl upwards. This will likely indicate that the negative trend is gathering momentum and that it can have more room to own.
All eyes stick to Bitcoin’s $6 000 support level, that your digital token haven’t tested since mid-August. The cryptocurrency continues to be trading sideways from a slightly positive divergence for the last three weeks, with all the price hovering between $6 300 and $6 600. The retail price dropped nearly 5% Thursday, extending its losing streak towards a third day.
Though digital token has trended sharply lower all climates and seasons due to increased regulatory scrutiny and limited adoption of cryptocurrencies generally speaking, some investors say Bitcoin’s drop today could be attributed in part towards broader market sell-off. US stocks on Wednesday had their worst decline since February, with the S&P 500 sliding for its minimum level since July.
“It’s simply mirroring the weakness in US stock futures overnight,” said David Tawil, president of ProChain Capital, a crypto-focused fund. “In case the currency markets shows strength today, I’d expect recovery.”
? 2018 Bloomberg L.P
