Bitcoin has now entered perhaps one of its most bearish periods ever. A cryptocurrency that has held up well through all the market scandals is seeing more bad news ahead. Previously, it witnessed a large number of consecutive red closes which solidified its entry into a bear market. However, this time around, it looks like the digital asset is ready to set another record, but this time for the worst.
Seven red candles
Anyone who has been following the market lately knows that Bitcoin is seeing multiple consecutive red closes. This wasn’t a cause for concern although the digital asset has a history of setting downtrends like these and it’s still showing up at the top. But this could be a trend unlike any other after the cryptocurrency saw its seventh consecutive red close.
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This would make this the first time in history that Bitcoin has indicated such a trend. However, what is more important is what the seven consecutive red candles mean for the cryptocurrency. With the digital asset still a seller’s market, a shutdown like this could lead to more selling as investors worry about the currency’s short-term future.
Furthermore, with several red candles appearing on the charts, this could indicate that there is more downside left. An example of this was set in the 2014 bear market which saw Bitcoin post four consecutive red closes. What followed was one green close that should give way to a more brutal downtrend. Now, if bitcoin reverses the move from 2014, another drop below $30,000 could be imminent.
BTC declines to $29,500 | Source: BTCUSD on TradingView.com
Not all bad news about Bitcoin
While the seven consecutive closes in red can often paint a bearish picture, this is not always the case. It is well known that a digital asset can record the most bearish patterns just before the recovery. Oftentimes, a massive recovery.
An example of this was in August 2018 when the market recorded six consecutive red closes. Since the market was in an extended bear market at that point, it was assumed that what would follow could only be more losses. However, this proved not to be the case as the digital asset continued to record five consecutive green closes.
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Now, this wasn’t the start of the next bull market but it showed that as much as these trends could indicate more downside trends to come, they could also be a precursor to a good recovery. Expectations for bitcoin this time around are high as the digital asset has now managed to top $30,000, although it is having trouble maintaining its position above this point.
BTC price is trending towards $29,600 at the time of writing. This puts it just above the 5-day simple moving average but continues to show bearish trends across other indicators.
Featured image from Cryptonaute, chart from TradingView.com