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Bitcoin came within a whisker of making a new lower low late on Monday. A bounce back to $25,850 happened instead.
Bitcoin came perilously close on Monday night to making a new lower low, which from a technical charts perspective would have been extremely bad news, and could have led to new lower lows at $24,300, and possibly $21,800 and even beyond.
Instead, bitcoin has grabbed itself a respite and potentially another bite at the cherry, which could see it reclaim $26,000 and perhaps kickstart the bull market once again.
However, in spite of the welcome relief for Bitcoin bulls, the narrative across the market and social media still appears to err much more towards the negative. Ryan Selkis, founder and CEO of Messari stated on his Twitter (X) account:
We’re approaching max pain. Bear markets last longer and go deeper than we want them to. Need a couple of capitulations, then chop, then rebirth.— Ryan Selkis ðª³ (@twobitidiot) September 11, 2023
This is near the worst sentiment that I’ve ever seen. Deeper than 2019. Closest feeling was 2015 for me.
Stock market still strong
Be that as it may for the world of crypto, in stocks things don’t look too bad at all. The S&P 500 (SPX) has rallied once again today, and the Nasdaq (IXIC) is following suit. The gaussian channel for both flipped green for both from July onwards, which is the same for bitcoin now, but from the beginning of August.
Gaussian channel bounce
Today’s bounce for bitcoin was from the middle of the channel. It would be good for the alpha crypto if it held here, but looking at the bottom of the channel, it can be seen that if price falls to it then this could well also match up with support at $21,800.
TradingView - Bitcoin weekly chart
The next few days are likely to be crucial for bitcoin and the crypto market. Liquidity is drying up, but stocks are still holding well. Crypto could be the canary in the coal mine here. Bitcoin needs to rally from here or another leg down into a bear market beckons.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.