BTC/USD Forex Signal: Double-Top Signals More Weakness - DailyForex.com
The pair will likely keep falling as bears target the key support level at 46,000.
Sell the BTC/USD and add a take-profit at 46,000.
Add a stop-loss at 51,000.
Timeline: 1 day.
Set a buy-stop at 49,500 and a take-profit at 51,000.
Add a stop-loss at 48,000.
The BTC/USD suffered a harsh reversal after rising in the past few days. The pair declined to a low of 47,900, which was more than 4,000 below the highest level on Monday. Other altcoins like Terra, Solana, and Polkadot also declined as the total market capitalization of all cryptocurrencies declined to more than $2.4 trillion.
Bitcoin Price Reverses
Cryptocurrency prices jumped sharply during the Christmas weekend. For example, Bitcoin jumped to more than $50,000 on Friday as the so-called Santa Claus rally got underway. This rally pushed the total market value of cryptocurrencies to more than $2.6 trillion.
In the past few days, the prices of cryptocurrencies have declined sharply. It is unclear why this reversal has happened considering that other assets like stocks and commodities have jumped sharply. For example, the SP 500 index has risen to an all-time high while the price of crude oil has risen to the highest level in about a month.
Perhaps, the decline has happened because of the ongoing regulatory risks especially in India and Turkey. This week, it was confirmed that Turkey is preparing its laws on cryptocurrencies. These laws come at a time when the country’s currency has crashed because of the actions by the government and the Central Bank of the Republic of Turkey (CBRT).
Meanwhile, India is planning to unveil its laws as early as next year. The country’s government has been relatively hostile to cryptocurrencies. According to media reports, the Reserve Bank of India (RBI) supports a complete ban of cryptocurrencies. Still, legal experts who spoke to Times of India said that it could be too late to enforce a ban.
The four-hour chart shows that the BTC/USD pair formed a double-top pattern at about 52,267. In price action analysis, a double-top pattern is usually a bearish signal. The chin of this pattern was at 49,418, which was also the highest level on December 16th. It crossed this level in the overnight session.
The pair also moved slightly below the 25-day moving average while the Relative Strength Index (RSI) has declined from about 72 to the current 25. The MACD has also moved below the neutral level.
Therefore, the pair will likely keep falling as bears target the key support level at 46,000. This view will be invalidated if the price moves above 49,800.