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  1. Home
  2. / Investing
  3. / Bitcoin

Bitcoin's Chart Suggests Buyers Beware

The bitcoin news flow has moved me to take a stand.
By BRUCE KAMICH
Nov 30, 2020 | 12:31 PM EST
Stocks quotes in this article: GBTC

This morning it dawned on me that perhaps we are seeing way too much coverage of bitcoin. On my Twitter feed, from the people I follow and sites I visit. A Google search of "bitcoin" revealed "about 416,000,000 results (0.79 seconds)."

Too much media coverage and speculative action, with the Winklevoss twins touting a super bullish view -- and internet chat tends to be a marker of extreme sentiment that only sees the upside return and ignores the downside risk. 

Let's check out a few charts of the bitcoin ETF.

In this daily Japanese candlestick chart of Grayscale Bitcoin Trust (GBTC) we can see some interesting clues. Prices show a bearish gravestone doji pattern Monday. Bearish confirmation would be good Tuesday but with a near-term peak in the On-Balance-Volume (OBV) line a cautious stance is a good idea. The 12-day price momentum study shows a peak last week and that just adds to the topping pattern, in my opinion.  

 
 
In this daily Point and Figure chart of GBTC, below, we can see a potential downside price target in the $12 area. The possibility of getting cut in half is not a positive outcome to look forward to. 
 
 
Bottom-line strategy: I have resisted writing about bitcoin for several years but the news flow Monday morning moved me to take a stand. Buyers beware!
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TAGS: Bitcoin | Investing | Technical Analysis | Financial Services | Technology | Real Money | Real Money Pro

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