Bitcoin has formed a bearish crossover on the weekly chart’s moving average convergence divergence (MACD) indicator. According to the crypto YouTuber, CryptoKid, that could lead to a price drop of up to 19% by the pioneer cryptocurrency.
CryptoKid made the statement during a video interview with the host of The Moon, a crypto YouTube channel that discusses crypto market trends and price developments. CryptoKid confirmed that using the MACD bearish signal, he has opened a short swing position for Bitcoin.
Aside from the MACD signal, CryptoKid observed that the Bitcoin chart could develop into a head and shoulders pattern. He shared a chart in the video indicating the head and shoulders pattern is still developing, with significant bearish tendencies. CryptoKid believes that fulfilling that pattern would imply that Bitcoin’s price will drop from the current level.
Although the signals are there, CryptoKid noted it is still too early to confirm the fulfillment of the bearish trend on Bitcoin. He observed that the price is still above the 200 moving average, representing strong support for Bitcoin’s price. According to him, if the price should bounce from the 200 moving average, the trend could change completely.
CryptoKid noted that a bounce from the moving average could lead to the formation of a double top, at which point the stop loss in his short position would be triggered. He explained that if that becomes the case, the trend could flip, and he would potentially enter a long trading position.
Despite the bearish signals on the weekly time frame, CryptoKid acknowledged the existence of bullish potential in the shorter time frames. With what he described as a ‘trend within the trend’, users can take long positions and ride the move to the indicated resistance for a significant profit.
At the time of writing, Bitcoin traded at $26,515, a price within the horizontal channel that CryptoKid expects a breakout would confirm the next Bitcoin direction.
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Source: Cryptocurrency - investing.com
