Mon 04 Nov 2024 ▪
4
min reading ▪ by
Luc Jose A.
A feared technical indicator has burst onto the weekly charts: the “Tombstone Doji.” This figure, often associated with a trend reversal, could signal a phase of turbulence for the market. Interest in this cross-shaped formation without a bullish anchor is all the more keen as investors had hoped to see Bitcoin cross the symbolic mark of $74,000. Instead, the queen crypto fell below $67,000, which shakes the certainties of the most optimistic.
The formation of the Tombstone Doji, a warning signal?
The weekly Bitcoin chart revealed an alarmist technical configuration this week, that of the “Tombstone Doji”. This configuration confirms a failure of buyers to maintain the price in the high zone. This is a signal that investors often interpret as signaling the end of an uptrend. Alex Dovbnya of U.Today explains that “this formation reflects a weakening of buyers in the face of a gradual takeover of sellers, the “bears”, after a failed attempt by the bulls to push Bitcoin beyond recent levels”.
Indeed, during this same week, Bitcoin approached the symbolic mark of $74,000, a level which could have marked a new inflection point. However, this rise was quickly followed by a fall towards $67,000, a sharp decline that reflects increasing volatility. This inability to sustain high prices has increased fears around the bearish pattern represented by the Tombstone Doji, especially since this indicator is generally considered to be a harbinger of an imminent correction in the market.
Sentiment indicators and other technical signals
At the same time, other technical indices reinforce investors’ concerns about the strength of the current uptrend. Despite a recent price drop, the Fear and Greed indicator still shows a high score of 74, indicating lasting optimism among investors. However, some are skeptical of this euphoria. Recent variations in Bitcoin show that it has not benefited from the hoped-for support of index funds, such as that of BlackRock, which should, according to some, have provided significant inflows to stabilize the price of crypto in the long term. .
Furthermore, technical signals such as Bollinger bands on hourly scales reinforce caution. The decline below the lower band in the four-hour time frame indicates intensification of selling pressure. Still, faint hope remains, with a bullish divergence signal on the hourly chart, indicating a possible decline in bearish momentum in the near term. This contrast in signals speaks to indecision that could keep the market in a phase of heightened volatility, with potentially sudden moves in one direction or the other.
While the market digests this Tombstone Doji formation, the outlook for Bitcoin remains unclear. While some anticipate a technical correction which will allow consolidation before a possible recovery, others fear a more marked downturn. The absence of new robust institutional flows reinforces this uncertainty. Thus, investors must remain attentive to upcoming technical indicators and consider the longer-term outlook for Bitcoin, in a context where each fluctuation could potentially impact market sentiment.
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Luc Jose A.
A graduate of Sciences Po Toulouse and holder of a blockchain consultant certification issued by Alyra, I joined the Cointribune adventure in 2019. Convinced of the potential of blockchain to transform many sectors of the economy, I took the commitment to raise awareness and inform the general public about this constantly evolving ecosystem. My goal is to enable everyone to better understand blockchain and seize the opportunities it offers. I strive every day to provide an objective analysis of current events, to decipher market trends, to relay the latest technological innovations and to put into perspective the economic and societal issues of this ongoing revolution.
