By Jeff Clark – the editor of the Jeff Clark Trader
The price of Bitcoin is breaking down.
It’s been a few weeks since we last looked at the King of Cryptocurrencies. Back then, we noted how Bitcoin was approaching the apex of a large consolidating triangle pattern. It was headed for a BIG move one way or the other. But, we didn’t know the direction. All we knew was that it would be a big move.
Now we know the direction. It’s lower.
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Look at this updated chart of the Grayscale Bitcoin Trust (GBTC)…
Bitcoin broke down last week. The price is now below the support of its 50-day moving average (MA – blue line) and its 9-day exponential moving average (EMA – red line). So, those former support lines are now resistance on any rally attempts.
More importantly, the 9-day EMA is about to cross below the 50-day MA. This sort of “bearish cross” has often signaled the start of significant declines in Bitcoin.
The black circles on the chart mark the three previous bearish crosses over the past year. Each of them led to declines of 30% or more within just a few weeks. It looks like we’re headed for something similar this time around.
Of course, it’s worth pointing out that we don’t yet have a bearish cross in the moving averages. As of Friday, the 9-day EMA was still above the 50-day MA. So, it’s possible that if GBTC rallies sharply today we can avoid that bearish signal.
But, it doesn’t seem likely.
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Anything short of a big rally in Bitcoin today is going to create a bearish crossover in the moving averages. And, with the financial markets shifting from a “risk-on” environment to “risk-off,” we’re not likely to see a big rally in Bitcoin today.
So, it looks like the King of Crypto is headed lower for the next few weeks.