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A fake Bitcoin move?

After the Wednesday’s Fed remarks, Bitcoin rose quite nicely, but yesterday was a bad wake up call for many, as it created a new low. What does that mean?

What has happened in the past 48 hours?

Past 48 hours were really interesting, since the overall market sentiment and situation was changing rapidly. During the Wednesday’s Fed conference, we have seen a 0.5% interest rate hike, which was expected. Most of the markets reacted positively to this news, since it was not a surprise. However, after few hours, the situation changed and the markets declined pretty significantly.

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Looking at BTC, the sentiment does not look promising. Bitcoin has created a new low, and even broke out of the previous structure. Support, which was holding it up, is now a resistance, which is currently a rather strong level. Until we are below this level, more downside can be expected.

TradingView Chart

4h chart of Bitcoin, Source: Author’s analysis, tradingview.com

What is the daily chart showing?

The daily chart makes it very clear that we have broken out of the structure (channel) that we have been in since the beginning of the year. Until now, the channel was one of the strongest supports Bitcoin had. But, the weekly close can tell us more than that, since it has the power to show whether more downside movement can be expected or whether this was only a premature scare. In either case, was this the significant move that we talked about last week?

TradingView Chart

1D chart of Bitcoin, Source: Author’s analysis, tradingview.com

Bitcoin vs. altcoins

We have currently seen a rather interesting development, since Bitcoin has lost more value than altcoins, which is rarely the case. What is however worse is the fact that Bitcoin has created a new Low and has broken out of the structure. Vast majority of altcoins has not done any of those two points. What we can see now is thus a rather inconsistent development between Bitcoin, which looks very bearish and altcoins, which are holding surprisingly well. It will be very interesting to see this play out in the next few hours and days.

Jakub is a crypto trader and founder of Trader 2.0 project, which helps hundreds of traders from central Europe to understand cryptocurrency trading and its challenges. Jakub not o...

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