Bitcoin Set For Worst Day In 16 Months After Major Reversal From All-Time High: Chart Shows 2 Bearish Signals
Tuesday witnessed a Bitcoin-style rollercoaster, with the cryptocurrency initially soaring to new all-time highs surpassing $69,000, only to tumble by 10% at 3:00 p.m.
ET, on track for its steepest daily decline since November 2022.
Among the swirling speculations surrounding this dramatic downturn-flash crash, market illiquidity, fat fingers, profit-taking behaviors, and more-no definitive explanation has emerged in the crypto community.
Yet, it’s possible that the truth is far more straightforward than the speculation indicates.
Bitcoin has been and will always be a high-risk investment, drawing investor flows during periods of bullish market sentiment. Historically, it has exhibited a strong correlation with tech stocks.
Thus, on a day when bearish sentiment grips Wall Street, the highly speculative segments of the market, including Bitcoin and other cryptocurrencies, tend to suffer disproportionately.
At the time of writing, the tech-heavy Nasdaq 100, tracked by the Invesco QQQ Trust (NASDAQ:QQQ), had plummeted by over 2%.
Chart: Bitcoin Eyes Worst-Performing Session Since Early November 2022
BTC/USD Technical Analysis
Technical signals emerging from the daily Bitcoin chart suggest two potential patterns:
- A bearish engulfing
- A bearish RSI divergence
Bearish Engulfing Formation On BTC/USD Daily Chart
Today’s red candlestick fully engulfs the bullish candle from the previous day, unless bitcoin manages to close the session above $63,200. In essence, the bearish candle covers the entire price range of the preceding bullish candle.
Among traders, the bearish engulfing pattern is considered a robust signal, indicating a shift in market sentiment from bullish to bearish.
