Warning: Bearish Divergence On Bitcoin. Crash To $9,500?

9:31 pm, Tue, 4 August 20

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Bearish divergence is a trading pattern popular among crypto traders, this pattern helps us find areas of exhaustion, price weakness, and a potential dump in the market.

Why is this important right now?

Well as we speak, the Bitcoin price as printed the bearish divergence pattern on the 4-hours timeframe. This is a clear warning sign that signifies weakness in the current Bitcoin bullish trend and a likely crash to the $9,500 support region in the coming weeks.

Bitcoin Bearish Divergence

But will this crash really happen or will Bitcoin just shrug it off and continue heading higher? I will be talking about all that and more in this Bitcoin analysis.

I will also be pointing out important support regions to watch out for as well as providing you my bullish and bearish price scenarios and forecast for the Bitcoin price.

Does The Bearish Divergence Mean A Change In Trend?

Bitcoin is still overall in a bullish trend and I believe it will remain that way unless the price can break through and close below the $10,386 support region.

Bitcoin is still in a bullish trend

I talked about the importance of this support region to the current bull run in my Bitcoin analysis titled “Bitcoin Flash Crash: What Happened, Why And What Next?” You can read all about it to understand what exactly the Bitcoin price is doing.

With that being said, I also believe the price weakness expected from the Bitcoin divergence might have already played out with the flash crash that occurred earlier this weak.

Bitcoin price divergence might have already played out

If this is true, then we can expect to see the Bitcoin price start to move higher in the coming days. However, for now, Bitcoin as no direction and therefore no trading opportunity for me.

Bitcoin Currently In No Man’s Land

Bitcoin as been trading sideways since the flash crash that occurred earlier this week. This sideways move as created a channel of support and resistance the Bitcoin price is currently bouncing off of and respecting.

Bitcoin currently trading in no man's land

For as long as Bitcoin continues to trade in this sideways channel, it is better to stay out of the market because “Bitcoin is in no man’s land” and we do not know what direction the price might decide to break out.

However, what we do know are the important levels to watch out for a price entry to the upside or to the downside.

Important Levels To Watch Out For

The two important levels I am currently watching out for is the top and bottom of the channel price is currently trading in.

Bitcoin Bullish scenario

A break to the top could see the bullish trend returning and the Bitcoin price heading to the $20,000 region soon.

However, a break to the downside could see Bitcoin getting weaker and the price pushing downwards to the $10,000 support. If price breaks through this $10,000 support, there is a high probability we might dump to the $9,500 region.

Bitcoin bearish scenario

To gain more information on how to partake in this coming Bitcoin Bull run and trade this cryptocurrency, you can read my How To Trade Bitcoin Guide. You can also check my top list of Best Bitcoin Exchanges To Trade With.

If you are looking for the best cryptocurrencies to put on your watch list and trade, then check out my Top 25 Cryptocurrencies by Market Capitalization

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