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Market Update: Bitcoin Downside Breakout?

July 20, 2021
by Joseph Jeffriess, Market Analyst

Has Bitcoin broken out to the downside? Price has moved lower for a second day moving through key support.

Today sellers have moved back below key support. This is not the first time we have seen this, as the price has made multiple moves below previously without being able to hold a close. We want to see a close below this level today to start thinking, this could be a confirmed breakout of the descending triangle pattern.

If we do see a confirmed break and new extension lower, the measured move suggests a rather nuts price target below so I’m not getting too far ahead at this point. Measured move target area is just below the 15K level, that’s basically most of the remaining trend.

Another interesting pattern we can see back around the final high is a head and shoulders pattern. This can be seen as trend changing and for now. It looks like that warning was accurate due to the first plunge lower after the second shoulder. That decline also confirmed the first LH that continues a series of LHs. We’ve seen two LLs that shows normal trend behaviour but we want to see a new LL set up after this weeks push lower to continue the pattern of normal trend points.

Bitcoin Daily Chart

If we see a turnaround today which closes back above support we’d see that as a small warning. On the bear side, it’s really up to sellers now to show they have control and close the market below support and follow it up with a new low that breaks 28,811.

All times are AEST.