In July 2010, Bitcoin enjoyed a high increase by a staggering 150,000% since its first listing on exchange.
Since then, Bitcoin has seen so many bear as well as bull runs and during this period gained a lot of attention from the media. Technically speaking, Bitcoin’s relationship with traditional charting patterns is occasionally counters initiative, in contrast to general expectation.
There has been a significant relationship with Bitcoin and the 200-day moving average (DMA). Meaning descending triangles is carried out by connecting a series of lower high, most times at 45 degrees and then breaking down from left to right, creating a primary trend line in the process. The horizontal floor is formed when two or more of the invest lowest lows are connected by a secondary baseline.
The pattern you end up with is a descending triangle, which explains a loss of confidence in the asset you considering. March 2014, was the second down the break down of Bitcoin from the descending triangle occurred and since then nothing of such has.
The bitcoin price falling under the 200 DMA reveals a bearish market and this time, it is also not an exception. History will indicate that very soon, an upside break of the current descending triangle will happen and could result in a move above the DMA which reveals a larger trend reversal.
It is also very important to remember that pattern are different in size and scope,which usually affects the price action that results. Ran Nuener (CNBC cryptotrader) therefore said that if all fundamentals are considered, bitcoin might likely be bullish in early 2019.
In the last seven months, bitcoin has been staring down a bear market and from 5th of February, has dropped below 200-DMA. An ideal technical set up for additional depreciation will be created by the descending triangle when a bearish price is combined with bearish trend, and with this, a further depreciation will happen even if the bear view tends to be negated by bitcoin. If a break down in price happens as expected, the falling price might likely be supported by a resistance and support Zone in the $4,900 to $5,400.
On the other hand, if there is a break up in price, then to prove that a bearish to bullish trend change is in order, the nearby lower highs needs to be surpassed on the higher time frames.