- Bitcoin price has printed steep bearish engulfing candles on the 4-hour chart.
- BTC price has lackluster action following the Monday morning sell-off.
- Invalidation of the bearish thesis is a close above $40,400.
Bitcoin price opens this week's trading session with bearish force. Traders should keep a close eye out for a new bottom.
Bitcoin price needs a true bottom
Bitcoin price is disappointing bullish traders as the price has 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 be aware of.
Bitcoin price offers mixed signals, but a dollar-cost average approach could benefit Bitcoin enthusiasts in the long run. Last Friday's thesis mentioned that the bears might have gained momentum following a large bearish engulfing candle established on the 8-hour chart. Now the bears have matched the first display of strength with additional power, as the price has printed another bearish engulfing candle on the 4-hour chart, wiping all of the weekend price action off the boards.
BTC/USD 4-Hour Chart
Bitcoin price Relative Strength Index has printed bullish divergence; however, it does not lie within buyers' territory on the 4-hour chart. The bullish price action following the sell-off lacks anything for knife-catching traders to boast about as the price has barely moved. $39,500 could be a good place for a long-term investor to place a bid, but professional traders are unlikely to qualify the BTC price as the imminent bottom. Traders will likely be looking for a fall into $36,000, where more liquidity lies prior to the March rally.
Invalidation of the bearish thesis is a close above $40,400. If the bulls can establish price action back into the previous consolidation zone, they may stand a chance to conquer the downtrend. If so, the BTC price could rally back towards 44,000, resulting in a 15% increase from the current BTC price.