Tue. Oct 15th, 2019

Bitcoin (BTC) Could Slowly Collapse To $3,600 If Textbook Trend Plays Out

Bitcoin Could See 15% to 20% Pullback Next Week

An analyst with the moniker “Magic Poop Cannon” recently warned investors that Bitcoin (BTC) could see a large pullback in the coming weeks. In an analysis posted to Trading View, Magic explained that BTC’s rally from $3,400 in January to $5,450 just last week “painted half of an enormous evening star doji pattern,” adding that the movement has been in “textbook formation” thus far.

For those who missed the memo, an evening star is a reversal pattern, in which there is a large uptrend (seen last week), stagnation (this week), and reversal. A doji candle is one in which its opening and closing price are effectively the same, signaling indecision in a market.

If this “evening star doji” pattern plays out as Magic expects, Bitcoin could see a 15% to 20% drop to $4,100 in the coming ten days, and then sell-off even further, potentially to the mid $3,000s, to finish this formation.

Magic’s bearish sentiment was backed by the fact that while Bitcoin has surmounted its 200-day and 200-week moving averages, it got rejected at the arguably more important 50-week moving average, signaling that BTC isn’t home free just yet.

This isn’t the first time that Magic has expressed that Bitcoin traders should be cautious in the days to come. As reported by Ethereum World News previously, while Bitcoin’s early-April rally, which brought it past $4,200 and its 200-day moving average, was bullish, BTC failed to break past a “large uptrend channel.” As a foray past the upper trend line was rejected in the form of a massive, rapid Bitcoin sell-off, Magic claims that there’s a potential for BTC to fall to the bottom of its channel, currently sitting at ~$4,300.

Still Bullish… In The Long Term Anyway

Photo by Sharon McCutcheon on Unsplash