Bitcoin - Head and Shoulders - Bearish Divergence - Warning?
Disclaimer: I remain very bullish on Bitcoin long-term that being said, I do think that caution never hurt anybody particularly when Bitcoin is getting more and more news coverage (I tend towards a contrarian approach)
As we can see there is a clear bearish momentum divergence, with each price peak printing a LOWER momentum reading, this coupled with the potential Head and Shoulders pattern leads me to advocate LESSENING, not outright exiting, but LESSENING your exposure to Bitcoin, at least until this pattern resolves, either bearishly or until it is invalidated to the upside.
With Bitcoin's marketcap sitting at 1.08 Trillion, I do not expect retail investors to be able to substantially drive the price any longer, at least not as it has done in the past, institutions, not retail will be the ones driving the next leg higher.
I do not believe that institutions want to pay upward of $60,000 USD/ Bitcoin, they want to buy cheap and when there is fear in the market.
I do concede that if institutions are desperate enough, they will pay whatever it takes, however, given the ability of retail investors to influence price has been greatly reduced (due to the explosion in price), I do think that institutions would be willing to let the market ease, before taking a position.
Should this pattern resolve to the downside, it is possible we could see Bitcoin around $40,000 USD, which I will say, would be FANTASTIC, as this would allow institutions to enter and retail to enter at 'safer' (psychologically) levels.
I will reiterate, I am not saying to exit Bitcoin, I am suggesting lessening your exposure to a degree that you are comfortable, should the price fall to $40,000 USD.
-TradingEdge
As we can see there is a clear bearish momentum divergence, with each price peak printing a LOWER momentum reading, this coupled with the potential Head and Shoulders pattern leads me to advocate LESSENING, not outright exiting, but LESSENING your exposure to Bitcoin, at least until this pattern resolves, either bearishly or until it is invalidated to the upside.
With Bitcoin's marketcap sitting at 1.08 Trillion, I do not expect retail investors to be able to substantially drive the price any longer, at least not as it has done in the past, institutions, not retail will be the ones driving the next leg higher.
I do not believe that institutions want to pay upward of $60,000 USD/ Bitcoin, they want to buy cheap and when there is fear in the market.
I do concede that if institutions are desperate enough, they will pay whatever it takes, however, given the ability of retail investors to influence price has been greatly reduced (due to the explosion in price), I do think that institutions would be willing to let the market ease, before taking a position.
Should this pattern resolve to the downside, it is possible we could see Bitcoin around $40,000 USD, which I will say, would be FANTASTIC, as this would allow institutions to enter and retail to enter at 'safer' (psychologically) levels.
I will reiterate, I am not saying to exit Bitcoin, I am suggesting lessening your exposure to a degree that you are comfortable, should the price fall to $40,000 USD.
-TradingEdge
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