On June 22nd BTC spiked down and broke support at its April 1st low at $6,425. It then dropped a little lower to $5,755 where it hit the bottom of its down-channel that it’s been in since the May 5th high at $9,990.
We wait to see if it will now head for at least the top of its down-channel, currently near $6,600, or continue lower to strong support at $5,000 to $5,400.
The longer-term bullish divergence on MACD continues — shown with the uptrend line since the February low. There is also short-term bullish divergence at the June lows.
This means the selling momentum is slowing but we don’t know if a bottom is in yet.
A positive bullish signal would come when BTC breaks out the top of its down-channel from May. A rally above $6,600 would also have BTC back above its 20-day moving average, which would be a good intermediate buy signal.
You can see on the chart how BTC struggled in early June to get above both the top of its down-channel and its 20-DMA.
The sellers then pounced and spiked BTC to the downside on June 10th. As long as we see spikes to the downside and choppy bounces the price pattern remains weak.
We have to consider the potential for further downside to wring out more sellers but I encourage you to simply hang on (be a hodler).
Don’t be a seller down here, especially since we’re getting some positive signals that the selling could soon be ending. Trust your instruments as we navigate through these clouds.
New coin spikes 80%!
While the rest of the cryptocurrency market continues to struggle with lower prices there is one coin in our portfolio fighting the trend. Dignity (DIG) has benefitted from positive news and its price spiked about 80% higher off last week’s low.
Now we wait for some of its good news to rub off on the rest of the market.
Otherwise, the month of June is turning into another one for the bears. More FUD (Fear, Uncertainty and Doubt) from news media has contributed to some of the selling.
Another hacked crypto exchange, the latest being Bithumb, hasn’t helped people feel confident about exchanges.
When Bitcoin was initially developed by Satoshi Nakamoto, the idea was a digital currency that could eventually replace fiat currencies. The main critique has been rampant problems created by the Federal Reserve that weaken fiat over time.
In an interesting twist, the Federal Reserve has now decided to start tracking crypto prices, starting with BTC, ETH, BCH, and LTC. This means the Federal Reserve has officially recognized the crypto currency market and is now tracking this market just as it tracks fiat currencies.
Continue to build your investment position with a disciplined approach, keeping in mind your established percentage allocation to cryptocurrencies. We still need to consider the potential for lower prices during this year’s bear market correction.