Ever since the unfortunate drop on September 25, Bitcoin managed to form higher highs indicating an uptrend in play, however, the daily price candle formed on November 7 put this uptrend to a standstill and induced a downtrend. Additionally, this downtrend has put the price of Bitcoin below the 200-day MA indicating a future infested by bears.
A volatility induced spike was awaited since the price had formed a continuation pattern [or pennant] as the price hovered around $9,200. The spike came to life on November 8 as the daily candle collapsed a total of 6.40% on Bitstamp and the price, at press time was $8,800.
The breakout of the triangle could lead to more downside for Bitcoin since there isn’t strong support between the current price and $8,400 to $7,900 range. Adding to this bearish scenario is the 200-day MA, which has been breached by the price second time in over 45 days. On a daily time frame, one price candle has closed below it indicating confirmation of the incoming bearish trend. Factoring in the 50-day MA indicates that the death cross is in play.
Moreover, the volume profile shows strong supports in the $7,900 range, in the vicinity of the 0.5 Fibonacci level. Breaching this would cause a waterfall drop to $7,300 and $6,300.
The Relative Strength Index [RSI] indicator also shows an opening that could push the RSI below 50 and possibly in the lower 40 levels, causing a decrease in the buyer momentum.
The 30-day volatility of Bitcoin has reached ~4% which was last seen more than six weeks ago. Days before the unfortunate drop, the volatility of Bitcoin had reached a low of 2%, half of what was seen today.