* See UPDATE below...
Further to my post of April 10 (and subsequent updates therein), BITCOIN dropped below the lower moving average of the William's Alligator on Thursday to a low of 35,198 (after plunging around 45% from its April 14 high of 64,374), as shown on the following weekly chart. All three moving averages (offset into the future) are curling down... signalling further weakness ahead on this timeframe.
A drop and hold below 35,000 could send price plummeting to 30,000, or even lower to 20,000.
Volatility has spiked and is still rising to new highs in this "klepto-currency," as represented by the ATR indicator (shown in histogram format with a value of one period).
As I write this post in Thursday's overnight trading session, price has bounced back up into the Alligator's jaw (AKA its chaos zone...in between the upper and lower MAs). I expect to see large whip-saw swings in both directions until traders decide whether to "love or leave" BITCOIN once and for all. However, their allegiance in either scenario may be "transitory," to borrow the Fed's current characterization of "inflation."
Watch for the upper moving average to move below the middle one as a clue that the first downside target (30,000) may, in fact, be hit.
Otherwise, BITCOIN will need to break and hold above the entire Alligator formation, if it's going to move to new highs with any conviction.
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| May 20 |