Bitcoin has been in a death spiral for the last two weeks, as concerns over the coronavirus continue to peak. The leading cryptocurrency by market cap has plummeted by over 20% in just two week’s time.
But after such a violent decline in such a short period of time, last night’s daily close may have given a signal of indecision and could hint that a possible, much-needed relief rally and reversal is near.
Coronavirus Concerns Continue to Crush Bitcoin Price, But Is a Reversal Near?
Bitcoin is an asset unlike any other and has had very little history in the financial market compared to the likes of the stock market, gold, and more.
The asset was created amidst the last recession and was designed with certain attributes to decrease the impact of future recessions should the asset ever fully come into favor over fiat.
But such a scenario is still ways off – if it ever comes to fruition at all.
Related Reading | The Real Reasons Why Bitcoin Price Has Plunged 25% in Two Weeks
For now, Bitcoin is a highly speculative asset, which makes it especially susceptible to investor emotional sentiment. And with the entire world in full panic mode over the coronavirus, it’s causing a steep selloff in the stock market and in riskier assets like cryptocurrencies.
The stock market saw its worst losses since the Great Recession, while Bitcoin has experienced a deadly drop of 20% in two weeks.
The fall has cut the asset’s year-to-date gains down from over 60% to just over 10%.
But a relief rally and possible full reversal may be in sight, according to the last night’s daily candle close on Bitcoin price charts.
One prominent crypto analyst spotted a notable candle showing indecision and possibly hinting about a potential reversal.
Last night’s daily candle closed as both an “inside bar” and a “spinning top.”
$BTC #Bitcoin daily chart – Spinning top + inside bar pic.twitter.com/TCX8yed4WV
— Big Cheds (@BigCheds) March 10, 2020
Inside Bar and Spinning Top Defined: Why The Daily Candle Close Matters
An inside bar candle is a candlestick that’s open and close is within the previous day’s candle body. This type of candle represents indecision in the Bitcoin, and can indicate both a potential reversal or continuation, depending on the range of the candle, its color, and other factors.
The candle was also a “spinning top.”
The word top isn’t a reference to the candle signaling the peak of a price movement, although it could reside at the top of a trend.
Spinning tops are called such due to their resemblance to the iconic child’s toy.
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These candles exhibit a tiny candle body, with long wicks or shadows on either end, showing near equal pressure from bears and bulls, leading to indecision at close.
According to Investopedia, “spinning tops may signal a significant trend change.” The description further continues, explaining that “a spinning top at the bottom of a downtrend could signal that bears are losing control and bulls may take the reins.”
Will bulls finally take the reins again and turn this chaos around? Or will bears continue to push Bitcoin down to new lows amidst the coronavirus panic?