- The crypto bear market will continue if Bitcoin confirms its recent break below $20,000 according to the Fairlead strategy.
- The technical analysis-based research firm said secondary support for Bitcoin stands at $13,900.
- “Short-term momentum has shifted negative towards a new daily MACD ‘sell’ signal,” Fairlead said.
The crypto bear market will continue until Bitcoin confirms its recent break below $20,000, according to a note from Tuesday. Fairlead technique.
The technical analysis-focused research firm highlighted that Bitcoin is currently testing a support range between $18,300 and $19,500 following last week’s CPI-induced sell-off. Bitcoin was down about 0.5% at $18,950 after the Fed announced another 75-basis-point rate hike on Wednesday afternoon.
According to Fairlead’s Katie Stockton, a confirmed breakdown below the support range, which is two consecutive weekly closes below $18,300, raises the risk of bitcoin’s secondary support below $13,900. This represents a potential loss of 29% from current levels, and Bitcoin’s weakness will likely spread to other cryptocurrencies.
“The negative long-term momentum toward the monthly MACD histogram is increasing, allowing long-term oversold conditions to be absorbed. As it stands, it could take months for a meaningful reversal,” Stockton said. Moving Average Convergence-Divergence Indicator. “Short-term momentum has shifted negative as a new daily MACD ‘sell’ signal suggests, risks are rising as long-term support is tested.”
Bitcoin’s short-, intermediate-, and long-term momentum signals have all turned bearish amid ongoing declines, and a rollover of its 50-day moving average suggests momentum may be on the downside, according to Stockton.
Another bad sign for the crypto market as a whole is that since early September Bitcoin has again been outperforming Ether on a relative basis.
Ether is in sell-off mode following its successful merger, which moved the Ethereum blockchain from a proof-of-work to a proof-of-stake system. Ether’s decline has led Stockton to believe the cryptocurrency could test $1,000 as support, representing a potential decline of 27% from current levels.
“The shift in Bitcoin’s favor is a bearish sign for the cryptocurrency market broadly, reflecting a defensive rotation as Bitcoin and other altcoins enter support ‘retest’ mode,” Stockton said.
But bitcoin could reverse its bearish trajectory if it successfully avoids a confirmed break below support and regains resistance at $22,000, he said. Until then, expect the crypto bear market to continue.
