The tea leaves don’t bode well for Bitcoin.
Traders who look for future price direction in chart patterns are finding more indicators suggesting the world’s largest digital currency may have further to fall.
Bitcoin’s 50-day moving average has dropped to the closest proximity to its 200-day moving average in nine months. Crossing below that level — something it hasn’t done since 2015 — signals fresh weakness to come for technical traders who would dub such a move a “death cross.” Another moving-average indicator of momentum has already turned bearish.
While many cryptocurrency investors don’t follow technical analysis, the digital-coin universe is drawing interest from professional traders who pay growing attention to the indicators, after the token vaulted to a record in December.
“There’s been a definitive shift over the past couple of months after the bubble activity at the end of 2017,” said Paul Day, a technical analyst and head of futures and options at Market Securities Dubai Ltd.
The strategist studied the virtual currency’s 2013 tumble for clues on how it may act this time round. His conclusion? Gear up for a 76 percent tumble from late February highs, which would take Bitcoin to a paltry $2,800, if the downtrend is repeated.