- Bitcoin price printed steep bearish engulfing candles on the 4-hour chart.
- BTC price has lackluster action after the Monday morning selloff.
- The invalidation of the bearish thesis is a close above $40,400.
Bitcoin price opens this week’s trading session with bearish strength. Traders should keep a close eye on a fresh bottom.
Bitcoin price needs a real bottom
The price of Bitcoin is disappointing bullish traders as the price completely breached the support level at 40,000 over the weekend. The BTC price is currently trading at 39,600. The price level could entice early buyers to get involved. However, there are more bearish signals to consider.
Bitcoin price offers mixed signals, but an average dollar price approach could benefit Bitcoin enthusiasts in the long term. Last Friday’s thesis mentioned that the bears may have gained momentum following a large bearish engulfing candle established on the 8-hour chart. Now the bears have matched the first show of strength with added power as price printed another bearish engulfing candle on the 4-hour chart, wiping out all of the weekend’s price action on the boards.
BTC/USD 4 hour chart
Bitcoin Price Relative Strength Index Printed Bullish Divergence; however, it is not in buyers’ territory on the 4-hour chart. The bullish price action after the sell off has nothing to offer traders who are catching knives, as the price has barely moved. $39,500 might be a good place for a long-term investor to place an offer, but professional traders are unlikely to call BTC price an impending bottom. Traders will likely look for a drop to $36,000, where more liquidity lies ahead of the March rally.
The invalidation of the bearish thesis is a close above $40,400. If the bulls can reestablish the price action in the previous consolidation zone, they may have a chance to conquer the downtrend. If so, the price of BTC could rally towards 44,000, which would lead to a 15% increase from the current price of BTC.