Bitcoin breaks down from weekly pattern coinciding with harsh comments from Wall Street legends
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Bitcoin is weakening and has broken down from a rising wedge pattern on its weekly chart (aqua converging trendlines). We note the RSI is on the bearish side of 50 (green rectangle) and that the stochastic has turned down. If the stochastic makes it to its lower quintile and holds there (blue arrow), a bearish momentum will pressure the cryptocurrency.
The pattern breakdown coincides with strong comments at Saturday's Berkshire Hathaway annual shareholder meeting. First, Warren Buffet and Charlie Munger reiterated their criticism of the cryptocurrency. Buffet said, "Whether it goes up or down in the next year, or 5 or 10 years, I don't know. But the one thing I'm pretty sure of is that it doesn't produce anything." Then, less diplomatically, Munger maintained that "In my life, I try and avoid things that are stupid, evil and make me look bad in comparison to somebody else…and bitcoin does all three."
Russell Shor
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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