Things are moving fast for bitcoin, and unfortunately in the wrong direction. It has only ever happened once that bitcoin was red for 6 weeks in a row. This week, that record could be broken. Let’s look at the prices.
Trend line broken
To start, we look at the daily chart, where each candle is 1 day. There we can see that bitcoin dropped considerably further after breaking the trendline. Back in previous analysis we warned about this, and unfortunately this scenario came true.
Currently, the price is almost back at $32,000. This is because the price has found support around the same spot where the 2021 low was. Unfortunately this is more bad than good, because this support has been touched many times.
Are the buyers running out?
The reason the price keeps getting pushed back up in this spot is because there are more buyers than sellers. However, the number of buyers runs out at some point. If that happens at this spot, it will not be positive for bitcoin. Indeed, this is the last support until bitcoin price reaches $20,000 – at the all time high of December 2017.
We can see this best on the chart above. Right now the price is being pushed back to the blue zone, but if that will fail, there is no support where bitcoin can settle down. At least not until $20,000. I know this is a bit of doomsday thinking, but it is good to consider multiple scenarios.
Since this analysis is very negative – unfortunately we have no choice – we also need to look at the price in a somewhat positive light; it has never happened before that bitcoin has turned red for 6 weeks in a row. How is this positive? Let’s us explain that to you.
The chart above shows the last time bitcoin turned red for 6 consecutive weeks; in the late summer of 2014. It has not been possible to attach a seventh week to that so far. And since this has never happened before, it is also likely that it will not happen this week.
Unfortunately, this is no guarantee that bitcoin will actually go green, but since the chance has never occurred, it is logical to make this assumption. This would allow us – at least for one week – to take a breath.