- According to Fairlead Strategies, the crypto bear market could continue if Bitcoin confirms its recent dip below $20,000.
- The technical analysis-based research firm said secondary support for Bitcoin is at $13,900.
- “Short-term momentum has turned negative based on a new ‘sell’ signal from the daily MACD,” Fairlead said.
According to a report on Tuesday, the crypto bear market is likely to continue as long as Bitcoin confirms its recent dip below $20,000. fairlead strategy.
The research firm, which focuses on technical analysis, highlighted that Bitcoin is currently testing a support range between $18,300 and $19,500 following last week’s CPI-induced sell-off. Bitcoin fell about 0.5% to $18,950 after the Federal Reserve announced another 75 basis point rate hike Wednesday afternoon.
Fairlead’s Katie Stockton said a two-week close below $18,300 would confirm a break below that support, increasing bitcoin’s downside risk to secondary support near $13,900. This represents a potential downside of 29% from current levels, and Bitcoin’s weakness could spill over to other cryptocurrencies.
“On a monthly MACD histogram, negative long-term momentum is growing, allowing long-term oversold conditions to be absorbed. For now, a meaningful turnaround could take a few months,” said Stockton, referring to Moving Average Convergence-Divergence Indicator“Short-term momentum has turned negative based on new daily MACD ‘sell’ signals, with increased risk as longer-term support is tested.”
Bitcoin’s short-, medium- and long-term momentum signals have all turned bearish amid the ongoing decline, with a flip of its 50-day moving average suggesting momentum could continue to the downside, Stockton said.
Another unfavorable sign for the broader crypto market is that Bitcoin has once again outperformed Ethereum in relative terms since the beginning of September.
Ethereum has been in sell-off mode following a successful merger that transformed the Ethereum blockchain from a proof-of-work to a proof-of-stake system. The fall in ether has convinced Stockton that the cryptocurrency is more likely to test $1,000 as support, with a possible 27% drop from current levels.
“The shift in Bitcoin’s favor is a bearish sign for the cryptocurrency market, reflecting a defensive rotation as Bitcoin and other altcoins enter a supportive ‘retest’ mode,” Stockton said.
But she said bitcoin could change its bearish trajectory if it manages to avoid breaking support and recover resistance at $22,000. Until then, the crypto bear market is expected to continue.
