Bitcoin Bearish Trend Reversal: 4 Technical Signs

Capturing trend reversal signs at the early stage is an endeavor of every trader. Fortunately, technical analysis offers valuable tools to identify trend reversal signs. I have done a detailed technical analysis of Bitcoin and found 4 strong trend reversal signs. These signs suggest a bearish trend may prevail in Bitcoin in the coming days.

1. Up-trendline Breakout:

The trend line denoting the recent uptrend has been broken downwards. After the downside breakout, Bitcoin price has retested it, confirming the breakout. So uptrend doesn’t prevail for the time being.

The trend line denoting Bitcoin uptrend has been broken downwards.
Bitcoin Up-trend Trendline Breakout

2. Elliot wave Analysis Suggests 5 waves of uptrend are completed:

The figure below shows Elliot waves applied to the recent rally in Bitcoin price. It is evident that all the 5 Elliot waves are completed. According to Elliot wave theory, after the completion of 5 waves, the corrective phase starts. So it is the turn of downward correction.

Bitcoin Elliot wave analysis suggests all 5 waves all completed for this trend.
Bitcoin Elliot Wave Analysis

3. Bearish Divergence Formation in RSI:

Bearish divergence is a strong sign of a downtrend. For the recent high in Bitcoin price, no high is observed in RSI (Relative Strength Index); it has shown a lower high making it a bearish divergence with price.

Bearish divergence formation in BTC daily price chart.
Bearish divergence formation in BTC

4. Bulls are Exhausted says Volume Analysis:

As a trend proceeds, increasing volume justifies the trend. But in the recent BTC rally, the volume dried when it made a recent peak. It suggests that fewer traders are willing to buy at elevated BTC prices. In other words, BTC bulls seem exhausted which may halt the uptrend for the short term.

BTC volume analysis reveals that trading volume is declining as the trend proceeds.
BTCUSDT Volume Analysis


The above technical analysis of Bitcoin price chart reveals that the uptrend has been completed as indicated by a downward breakout of the up-trend line and the completion of 5 Elliotwaves. Furthermore, bearish trend reversal signs like bearish divergence in RSI and declining volume signal a bearish trend for the short term, say, a few weeks.

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