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.
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.
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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.
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.
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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