Bitcoin’s Altitude Sickness Hits Home as Downside Continues

Bitcoin has continued its rapid descent from $9,100, but it’s clearly still suffering from altitude sickness as it looks like it wants to come down even further. The $10,000 calls of one week ago have been replaced by more bearish overtones, with the fear and greed index having moved from 78 last month to 46 right now, illustrating the shift in sentiment. Having dropped $1,300 from its yearly high we can finally dispense with the five figure calls and focus on BTC’s more realistic price range.

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Where Will BTC Land?

The weekly BTC candlestick fully engulfed the prior two weeks and made a bearish close below $8,200, meaning that $7,300 will likely be reached in short order, and the chances of a further drop to below $7000 or even the next weekly support at $6,400 are also possible. On the daily time frame, the close below the previous daily close and a moving average cross are two signs that confirm a bearish overview. There is the possibility of testing the weekly time frame wick ($7,950), but this should be an area where those who engage in margin trading should be considering a short. The only invalidation of the current short setup would occur if BTC is at $8,200 this time next week, which is not looking likely.

Despite this bearish sentiment, it should be remembered that we are in a general uptrend, and the only reason why we are experiencing the current pullback is because of May’s parabolic rise. Therefore, the chance to buy BTC under $7,000 should be seen as an absolute gift.

Step Away From the Alts

Alts in general followed BTC’s path, with a couple of outliers such as NAS, GXC, and NULS achieving double digit gains while all the others were falling. Even the recent safe havens of the Binance IEO coins were feeling the heat, with all of them finally succumbing to the pressure of BTC’s downwards tug. With BTC looking like it wants to retrace further, alt plays are not recommended at this time, as we all know what a $1,000+ BTC retrace would do to them. Anyone who wants to dabble in alts should employ tight stop losses to limit potential losses until more attractive setups present themselves.

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