Since October 2021, our working thesis, based on weak underlying technical data within the cryptocurrency space, has been bearish.
In October 2021, Bitcoin was in an uptrend and approaching all-time highs. The problem was that the advance was occurring on very weak volume and approaching major resistance (all-time highs). You can view these updates on our website: Cryptocurrency Investing Blog | Asset Solutions
Since hitting marginal all-time highs in November 2021, Bitcoin has retreated and is now in a confirmed downtrend and looking weaker by the day. The cryptocurrency has now dropped decisively below its long-term uptrend line and historically this has been a precursor to additional crypto market weakness.
Below is a long-term weekly chart ofBitcoin. I have annotated two similar past uptrend line breaks with a red box that encapsulates the break and ensuing fall. In addition, I have noted the total correction from peak-to-trough. The current drop in Bitcoin is about 40%, less than half of those two bear market corrections.
A similar bearish trendline break can be seen in Ethereum, which I have charted below. Ethereum had two uptrend breaks both of which saw substantial additional losses after those lines were violated.
For a more detailed explanation of our analysis you can view our recent crypto update video here: Long-Term Bearish Signals - YouTube