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Nasty Pullback Inbound? Analyst Warns That Bitcoin (BTC) Isn’t Bullish Yet

Bitcoin MACD Looks To Cross Bearish, Sell-Off Possible

Over the past 48 hours, Bitcoin has trended higher, posting a 2% gain in the past 24 hours after a 10% sell-off earlier this week, which optimists deemed the last shakeout before a bull run. One analyst, however, claims that there is more pain in store for BTC and its investors, remarking on the fact that key indicators are leaning bearish.

The analyst, who goes by the interesting moniker “Magic Poop Cannon,” explains that while Bitcoin’s early-April rally, which brought it past $4,200 and its 200-day moving average, was bullish, BTC failed to break past a “large uptrend channel.” As a foray past the upper trend line was rejected in the form of a massive, rapid Bitcoin sell-off, Magic claims that there’s a potential for BTC to fall to the bottom of its channel, currently sitting at ~$4,300.

While this seems bearish, especially considering that BTC reaching $4,300 from current levels would be a 17% drop, Magic argues that the technicals are hinting that it isn’t all sunshine and rainbows. More specifically, the Moving Average Convergence Divergence (MACD) is, per the trader, “poised for a bearish crossover. The Relative Strength Index (RSI), too, is showing signs that a further pullback is inbound.

As reported by Ethereum World News, analyst TradingShot claimed that each and every time daily RSI looked as it did last week (~85 or higher), BTC fell by upwards of 30%. In summer of 2017, BTC fell from $3,000 to $1,700 after its RSI peaked at 84, partially due to a series of China-related news. At the top of the bubble in late-2017, which was when Bitcoin breached $20,000, RSI reached 90, leading to a 47% drawdown in the coming months. Thus, if history plays out, a move to $4,000 is possible, which would fulfill Magic’s quasi-prediction.

Bitcoin Isn’t Home Free

Even if this scenario doesn’t come to fruition, a case could be made that cryptocurrencies aren’t in the clear just yet. Far from, in fact. In a recent tweet, Cold Blooded Shiller made it clear that it is too early to be bullish. The analyst recently drew attention to the one-week Guppy, a collection of moving averages that aims to predict trends, resistances, and supports, for Bitcoin. And it wasn’t exactly all too pretty.

While BTC’s 25% rally from $4,150 to $5,450 over the past two weeks allowed the asset to break out of the green band of the Guppy, the top (key resistance/trend reversal level) of the red band was rejected.

In fact, the wick to $5,450, in the eyes of Cold Blooded anyway, was a “beautiful bearish retest” in that it cements that BTC isn’t out of choppy waters just yet. Considering that the red band of the one-week Guppy acted as key support for Bitcoin in 2017’s rally, if BTC fails to break and hold past the red band, it may be that much harder to call for a bull run. Or in other words, until BTC holds above $5,800, maybe the bear market isn’t over.

Title Image Courtesy of Matt Sclarandis 

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