Bitcoin (BTC) has broken the parabolic uptrend which as we have discussed in our last analysis is the end of the bullish advance here. The price is now gearing up to begin its downtrend but it is unlikely to do that without the bulls fighting for control. The most likely scenario is that BTC/USD will find support atop the 50 Day EMA and begin its uptrend past $11,000 from there. At the moment, the probability of a move to the downside remains low because the price has seen serious downside over the past few days. We cannot expect it to keep on falling in this manner. The RSI has plenty of room to go up from here and even the NVT indicator on the daily chart remains hopefully bullish. The reason it remains bullish is because we have yet to see a sell signal and it has yet to break below its RMA.
Taking a look at the price again, we see that it has found support not only on the 50 Day EMA but also on the 38.2% fib extension level. This is a strong support zone and the price could use it as a launch pad to shoot towards the trend line resistance that came into effect when BTC/USD formed lower highs and lower lows after it topped out. Most professional traders were waiting for a break of the parabolic uptrend before they made their mind about selling or being bearish. Even if we were to be bullish long term, we would still need to realize that for the price to shoot towards a new all-time high this year it would have to respect the parabolic uptrend. That is what could have provided the momentum for the price to surge past $15,000 and then ultimately to a new all-time high this year. Unfortunately for the bulls, that did not happen and now the price is going to come closer to reality in the weeks and months ahead.
Bitcoin (BTC) reached an all-time high of $20,000 and it is still down significantly from there even after the recent parabolic advance. However, it still remains heavily overbought on larger time frames. RSI on the weekly chart shows how the price has topped out and is now eyeing further downside. This large rising wedge that we see on the chart is the only thing between BTC/USD holding its ground and falling below $3,000.
We have mentioned in our previous analyses that the first crash is going to be brutal that is going to pull the price below the 50 Week EMA as it did after the price topped out during the parabolic advance of 2017. If it happens this time we will see BTC/USD decline to the key support zone of $6,000. We are likely to see a bounce towards $10,000 from there which will most likely be met with strong resistance and then the actual slow bleed begins that will see the price bottom between $1,800 and $1,200 towards the end of the ongoing cycle.