October 25, 2020

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Break of “Market Structure” Puts Bitcoin Uptrend On Thin Ice | NewsBTC

Break of “Market Structure” Puts Bitcoin Uptrend On Thin Ice | NewsBTC


Bitcoin and the rest of crypto have been experiencing a strong uptrend since Black Thursday when markets nuked globally and no assets were safe from the carnage.

And while a flip into a downtrend isn’t yet confirmed, a break in market structure at the very least puts the uptrend on thin ice.

bitcoin btcusd

BTCUSD Break In Market Structure - Waiting For Lower Low | Source: TradingView

Bitcoin Market Structure Broken, But Downtrend Has Yet To Confirm Like Other Top Crypto

Bitcoin price is now trading in the low- to mid-$10,000 range, after falling from the 2020 high of $12,400 and once again being rejected at $11,200.

The two distinctly lower “tops,” have set the first lower high on daily timeframes, however, the cryptocurrency has yet to set a lower low. The initial break in market structure, one crypto analyst claims, could soon confirm a now, short-term downtrend across the board.

Related Reading | How Bitcoin’s 2020 High Compares To Past Bull Market “Tops”

Alongside Bitcoin showing such a pattern, the fourth-ranked crypto asset XRP is also exhibiting similar price action. Both top crypto assets could follow other, lower-ranked altcoins such as Litecoin, EOS, Chainlink, and Cardano all of which have seemingly confirmed the downtrend.

A downtrend, by definition, is a series of higher lows and lower lows, while an uptrend is the opposite. Bitcoin thus far has only potentially put the uptrend at risk but hasn’t confirmed a downtrend with a lower low.

litecoin ltcusd

LTCUSD Break In Market Structure - Lower Low Confirms Downtrend | Source: TradingView

2020’s Higher Low Puts Cryptocurrency Market In Jeopardy Of Lower Low Next

If Bitcoin is poised to reenter a downtrend and potentially revisit bear market lows, then the stock-to-flow model and any halving-based supply theories could be put to rest for good.

Those who subscribe to the idea of lengthening market cycles in crypto assets would be correct, and investors would have a lot longer to wait for Bitcoin to reach the lofty price predictions many hope for.

Related Reading | Bitcoin Fundamental Expert: “Clarity” Comes After “Rocky” Election Ends

On higher timeframes, Bitcoin has also set a lower high, with the 2020 low of $12,400 being over $1,400 less than the 2019 peak. A higher low on Black Thursday that retested Bitcoin’s bear market bottom, has kept the hope of an uptrend intact.

A higher low, however, is dangerous, and if daily timeframe trends turn down, the higher timeframe trend could do the same. And going by the definition of a downtrend alone, and what a bullish market structure should look like, the crypto asset could be in for another surprise collapse int he days ahead.

Featured image from DepositPhotos, Charts from TradingView



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