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Bitcoin and Cryptocurrency Market Sentiment on a Downward Trend
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The mood surrounding Bitcoin and the broader cryptocurrency market is taking a negative turn, with many major cryptocurrencies experiencing a decline recently. As of Friday, September 14, Bitcoin, the leading digital currency, dipped below the $95,000 milestone for the first time in over half a year. This downturn could potentially extend, as a rare and bearish signal has emerged for the first time in four years. Let’s explore the implications of this signal and the potential impact on Bitcoin’s price.
Potential 70% Bitcoin Price Decline if Bearish Signal Persists
In a recent update on X (formerly Twitter), Chartered Market Technician Tony Severino provided a concerning perspective on Bitcoin’s long-term price trajectory. According to Severino, a rare sell signal has reappeared on Bitcoin’s weekly supertrend indicator.
The “weekly supertrend” is a technical analysis tool that employs the Average True Range (ATR) and a multiplier to determine the directional trend of an asset over a weekly period. As depicted in the accompanying chart, the indicator showcases a green signal for an upward trend and a red one for a downward trend, offering traders potential buy and sell cues.
On Friday, Severino noted that Bitcoin had activated a sell signal on the Supertrend indicator within the weekly timeframe. This marks the first instance since December 2021 that such a signal has been triggered for Bitcoin.
During the last occurrence, the sell signal signaled the abrupt conclusion of a bullish cycle for Bitcoin, which was followed by a prolonged period of price depreciation. The price of Bitcoin plummeted by over 70% after the signal, amid significant market sell-offs following the Terra LUNA and FTX debacles in 2022.
If past trends hold any weight, this sell signal might indicate a potential 60-70% price drop for Bitcoin. Such a decline could potentially push Bitcoin back to the $30,000 range from its current levels. However, it’s essential to point out that the weekly supertrend sell signal remains unconfirmed. Despite the indicator showing a buy signal since January 2023, a weekly close below $96,300 might usher in a bearish market phase for Bitcoin.
Current Bitcoin Price Overview
At the time of writing, Bitcoin’s price is slightly above $94,400, marking an over 6% decrease in the past 24 hours.
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