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Bitcoin: Confirmation for a Corrective Trend 4H (May 27)

X Force Global Analysis:

In our previous analysis, we have mentioned that Bitcoin had found strong support at 8.8k, potentially looking to bounce to test resistance zones once more. In this analysis, we explore the bearish scenario suggested by Bitcoin's technicals.

Bearish Evidence

- One important thing to note is the fact that the ascending trend line support has been broken
- This was a trend line valid since 3.5k levels, but has now been negated
- We are also trading within a descending parallel channel, creating lower highs and lower lows
- The Relative Strength Index (RSI) also shows a clear downtrend, as it is continuously rejected by a descending resistance line, forming lower highs
- The Moving Average Convergence Divergence (MACD) also shows weakened bullish and bearish momentum
- While an attempt at another breakout is definitely probable, it is highly likely to get rejected at the parallel channel's resistance and the 0.5 Fibonacci resistance

Market Sentiment:

Long short ratios are at 68 to 32, with still more long positions than shorts. Many people are still counting on a bullish narrative, as a test of the 10k resistance is definitely one of the probable scenarios.

What We Believe

We believe that breaking and closing below the ascending trend line was strong evidence of confirmation for a further corrective trend. Important support zones to eye on are: 8.5k, 8.1k, and 7.7k

Trade Safe.