Trader Outlines New Prospects for Bitcoin Decline

A practicing trader and founder of the project Crypto Shaman Vadim Shovkun explains the current market situation.

Before analyzing Bitcoin, it is necessary to analyze the S&P 500. A detailed overview of the stock index was published a week ago on ForkLog; readers are encouraged to review it for a better understanding of the current market conditions.

At present, the price has clearly tested the height of the double bottom, pierced the red zone, and moved into a correction. Nearly the entire rebound was absorbed as sellers attacked with greater intensity.

In recent days the price has been pressed into an ascending channel, which, statistically, often resolves to the downside. The price sits below the second red mark at $4399, indicating risk in opening medium-term long positions.

For nine days now, Bitcoin has traded in a range of $41,000–$44,000. The price is tightening toward the $41,000 mark, forming a “descending triangle.” Statistically, such a pattern tends to resolve in the direction of the local trend—down.

Now let us turn to the local picture on the lower/mid timeframes. The liquidity cascade below the $41,000 mark has not been cleared. Five touches of the level again produced a bounce. The zone below this mark acts as a magnet for the price.

The morning bounce was not convincing for further upside. Comparing with the previous four-hour bar on the left from September 26, the current bar’s spread is larger and the vertical volume is lower. The red zone between $43,130 and $43,700 is an interesting range for looking for short positions.

Of course, the scenario can still be invalidated. The first break of the LH&LL structure signals a transition into a flat market — shorts should be delayed.

At the moment, medium-term expectations point downward. Of course, the price may still drift in a range for a few more days until the weekly timeframe closes. But as long as the $39,500 mark is not breached, talk of consolidation with any growth potential cannot be made. Given the buildup and the overall tightening, plus conditions in the stock market, a decline with a sustained move lower is expected.

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