Very simple answer to this question would be a straight Yes. I even think that it is rather likely scenario for couple of reasons.
Rejected price incline and a new Lower High
A part of crypto space was happy in the past few days due to the rise of Bitcoin and altcoins. We even reached a level of 47 000 – 48 000 dollars. This price level was, and still is, viewed as a crucial resistance to beat, mostly due to its huge liquidity. What does that mean?
This means that in the past a huge number of bitcoins were transacted around this level. And that is very important. To put it simply, if we have price levels where the liquidity and volumes are higher than elsewhere, the market tends to move towards those levels. You can very easily spot it through the volume’s indicator, which is at the right side of the screenshot below.
1D chart of Bitcoin, Source: Author´s analysis, tradingview.com
Ever since the price retraction started, we have mostly moved in one movement. The price of Bitcoin did not stop, and what is even more important, it did not even create a Lower High. We could spot some attempts to do so, but according to the rules of technical analysis, none of these would qualify as a clear Lower High. That is one of the reasons why I was still expecting a decent rise, which happened, and created a Lower High.
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Another reason why I believe we could move lower is the fact that we can easily spot a bearish flag formation in the charts. The strength of the price decline overall is much stronger than the upside movement, showing the possibility of another downward movement.
The channel that is created is looking almost perfectly to be called a corrective channel, which usually leads to more downside. To invalidate this, the channel would need to see a strong break of the upward resistance, which did not happen so far.
There are more reasons as to why I believe 30 000 dollars can be on the table. But I think that the chart speaks the loudest. Additionally, looking at fundaments and overall economic situation, there are not many positives that could easily be highlighted. And since Bitcoin was not able to break any significant level, the short term sentiment will probably be bearish for me.
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