Bitcoin is at a critical juncture

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Visual representation of digital cryptocurrency, Bitcoin is displayed in front of Bitcoin … [+] Coinbase cryptocurrency exchange price chart. (Photo by Chesnot / Getty Images)

2018 Chesnot

After peaking at $ 63,503 on April 13 of this year, bitcoin fell just over 50% to around $ 30,700 today. It is still up 6% for the year, but follows a steady downtrend since it attempted to recover from late April to mid-May and failed to reach a new high . There are two technical models that show bitcoin is at a critical juncture.

Bitcoin Price Table

StockCharts.com

Head and shoulders

StockCharts.com describes a head and shoulders pattern as the head and shoulder reversal pattern is made up of a left shoulder, head, right shoulder, and neckline. He adds that a head and shoulder reversal pattern forms after an uptrend, and its completion marks a trend reversal. The pattern contains three successive peaks, with the middle peak (head) being the highest and the two outer peaks (shoulders) being low and roughly equal. The reaction stockings of each peak can be connected to form a support or a neckline.

As can be seen in the bitcoin chart, between March and May of this year a head and shoulders pattern formed. And then it decisively went under neckline support at $ 50,000.

Descending triangle

The short-term technical bearish pattern that has formed is a descending triangle. StockCharts.com describes it as a bearish formation that typically forms during a downtrend as a continuation pattern. There are cases where descending triangles form as reversal patterns at the end of an uptrend, but these are usually continuation patterns. No matter where they form, descending triangles are bearish patterns that indicate the distribution (or sale of shares).

After an attempted rally in late June, bitcoin has seen a series of lows with the base of the triangle just around where it is currently trading. If the pattern holds, which is by no means a certainty, and bitcoin breaks below the base of the triangle, there is longer term support around $ 30,000, but it could easily fall. below this level.

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