Thursday's Market Minute: Bitcoin: Where To Watch

Cryptocurrency markets have been a bloodbath this week, with the reigning king bitcoin taking its fair share of the lumps. Generational-scale momentum trades can cut both ways, as the bitcoin futures contract tanked yesterday on massive volume and saw a decline of as much as -53% below its highs of scarcely more than a month ago on April 14. But bulls made a major push as prices declined below the 200-day Simple Moving Average currently near 31,458, rallying to a relatively better -11% drop on the day to close at 38,240.

Price recovered yesterday to close above the one-Standard Deviation Channel lower line, which suggests a reversion to the mean away from extreme levels. However, the Relative Strength Index (RSI) closed below the oversold line, which is typically a bearish development. Meanwhile, the Average Directional Index (ADX) has been steadily rising as the falling price action intensifies, which suggests this downtrend is building steam.

If the bulls start to rally, watch for a stall in the uptrend near the 48,000 level. This point is a rough confluence of the Linear Regression 50% Channel lower line, a volume node, and the previous lows from late-April. To the downside, the 30,000 level is the obvious point to watch for bulls to step in again.

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