Cryptocurrency Investing Blog: Long-Term Bearish Signals
Craig Thompson | Jan 10, 2022 01:10AM ET
Since October 2021, our working thesis, based on weak underlying technical data within the cryptocurrency space, has been bearish.
In October 2021, Bitcoin was in an uptrend and approaching all-time highs. The problem was that the advance was occurring on very weak volume and approaching major resistance (all-time highs). You can view these updates on our website: Cryptocurrency Investing Blog | Asset Solutions
Since hitting marginal all-time highs in November 2021, Bitcoin has retreated and is now in a confirmed downtrend and looking weaker by the day. The cryptocurrency has now dropped decisively below its long-term uptrend line and historically this has been a precursor to additional crypto market weakness.
Below is a long-term weekly chart ofBitcoin. I have annotated two similar past uptrend line breaks with a red box that encapsulates the break and ensuing fall. In addition, I have noted the total correction from peak-to-trough. The current drop in Bitcoin is about 40%, less than half of those two bear market corrections.
A similar bearish trendline break can be seen in Ethereum, which I have charted below. Ethereum had two uptrend breaks both of which saw substantial additional losses after those lines were violated.
For a more detailed explanation of our analysis you can view our recent crypto update video here: Long-Term Bearish Signals - YouTube
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