Top Story

Bitcoin struggles to regain bullish momentum

After the big upsurge in April and May, Bitcoin has started the month of June on the backfoot. Clearly, after such a vicious rally, there must be some long-side speculators banking profit, while nimble short sellers may have also been dipping in their toes here and there in order to take advantage of the severely overbought conditions. But as always, the key question is this: where is Bitcoin headed?

That is a million-dollar question that no one can answer with a strong degree of confidence, and in any case it all depends on your time frame. You could say, for example, that it will be going lower and it may well go on to drop by, say, $2K but only after another $1K rally first. Would you still be correct?

For what it’s worth, I don’t have any strong views as far as the longer term outlook is concerned, but what does worry me about Bitcoin is this: while it has the first-mover advantage and will be here for a very long time, it can easily be replaced by an alternative crypto in the future – perhaps by one which may have major technological advantages and uses over this old digital coin.

But as short-term focused traders, we only worry about now and next and less so about the past and the distant future. With that in mind, Bitcoin’s current technical configuration points to further short-term weakness.

That’s because Bitcoin has failed to hold its breakout from the prior triangle pattern and support in the $8000-$8160 region. This area may now turn into resistance, leading to further weakness in the short-term, perhaps towards $7000 and possibly more. The fact that BTC/USD has also broken its 21-day exponential moving average is an additional concern for short-term bulls as it points to loss of momentum.

So, unless Bitcoin climbs back above this moving average and the old support in the $8000-$8160 region and hold there, or forms a distinct reversal pattern at lower levels first, the path of least resistance remains to the downside in the short-term outlook.

Source: TradingView and

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.