Break of “Market Structure” Puts Bitcoin Uptrend On Thin Ice

Bitcoin and the rest of crypto have been experiencing a strong uptrend since Black Thursday when markets nuked globally and no assets were safe from the carnage.

And while a flip into a downtrend isn’t yet confirmed, a break in market structure at the very least puts the uptrend on thin ice.

bitcoin btcusd

BTCUSD Break In Market Structure - Waiting For Lower Low | Source: TradingView

Bitcoin Market Structure Broken, But Downtrend Has Yet To Confirm Like Other Top Crypto

Bitcoin price is now trading in the low- to mid-$10,000 range, after falling from the 2020 high of $12,400 and once again being rejected at $11,200.

The two distinctly lower “tops,” have set the first lower high on daily timeframes, however, the cryptocurrency has yet to set a lower low. The initial break in market structure, one crypto analyst claims, could soon confirm a now, short-term downtrend across the board.

Related Reading | How Bitcoin’s 2020 High Compares To Past Bull Market “Tops”

Alongside Bitcoin showing such a pattern, the fourth-ranked crypto asset XRP is also exhibiting similar price action. Both top crypto assets could follow other, lower-ranked altcoins such as Litecoin, EOS, Chainlink, and Cardano all of which have seemingly confirmed the downtrend.

A downtrend, by definition, is a series of higher lows and lower lows, while an uptrend is the opposite. Bitcoin thus far has only potentially put the uptrend at risk but hasn’t confirmed a downtrend with a lower low.

litecoin ltcusd

LTCUSD Break In Market Structure - Lower Low Confirms Downtrend | Source: TradingView

2020’s Higher Low Puts Cryptocurrency Market In Jeopardy Of Lower Low Next

If Bitcoin is poised to reenter a downtrend and potentially revisit bear market lows, then the stock-to-flow model and any halving-based supply theories could be put to rest for good.

Those who subscribe to the idea of lengthening market cycles in crypto assets would be correct, and investors would have a lot longer to wait for Bitcoin to reach the lofty price predictions many hope for.

Related Reading | Bitcoin Fundamental Expert: “Clarity” Comes After “Rocky” Election Ends

On higher timeframes, Bitcoin has also set a lower high, with the 2020 low of $12,400 being over $1,400 less than the 2019 peak. A higher low on Black Thursday that retested Bitcoin’s bear market bottom, has kept the hope of an uptrend intact.

A higher low, however, is dangerous, and if daily timeframe trends turn down, the higher timeframe trend could do the same. And going by the definition of a downtrend alone, and what a bullish market structure should look like, the crypto asset could be in for another surprise collapse int he days ahead.

Featured image from DepositPhotos, Charts from TradingView

My Newsletter

Sign Up For Updates & Newsletters

[mc4wp_form id="456"]