Bear Trend Begins To Take Hold In Bitcoin For First Time Since October 2020
Bitcoin price has now pulled back a full $13,000 from 2021 high to low. Yesterday’s massive bearish, red candle is one obvious sign that the trend is turning. However, a technical analysis tool used to gauge the strength of trends also confirms that bears have taken over the reigns from bulls and it could lead to a short-term downtrend.
Bitcoin Bears Regain The Upper Hand, Reclaim Crypto For First Time Since October
That’s exactly what has happened recently, with the top cryptocurrency shaving as much as $13,000 off its price from high to low. Yesterday’s daily close left behind an extremely bearish candle and reminder that asset prices don’t only move up in a straight line.
The recent parabola might have been broken, which could suggest a sharper correction is coming. Some of the best traders and analysts are expecting more downside before things turn back up.
The Average Directional Index confirms the bearish price action. The red DMI moving so sharply above the green is a clear sign that bears are now in control of the cryptocurrency’s daily trend once again.
The ADX itself is still well below 20, so the trend hasn’t yet fully taken hold. What’s notable is that this is the first time bears have reclaimed Bitcoin since October when FOMO spun out of control.
Trend Strength Measuring Tool Shows Bulls Aren’t Down For The Count Just Yet
The ADX is used to gauge the strength of the underlying trend, and like most tools, higher timeframes provide the most dominant signals.
Bears have won on the daily, but on weekly timeframes, however, the same tool shows that bears don’t really have a chance, and any downward momentum will be short-lived before bulls regain control.