Bearish Bitcoin Signal Fires, Raising Chance For A 77% Price Drop

A bearish signal from Bitcoin’s SuperTrend indicator projected a major decline, which could be reinforced by the Crypto Fear and Greed index registering “extreme fear.”

Bitcoin’s Supertrend indicator sent a “sell” signal that has led to a 77% price drop in the past.

The crypto sentiment index in “extreme fear” suggests there is more pain ahead for Bitcoin investors.

Bitcoin’s (BTC) SuperTrend indicator has sent a “sell” signal on its weekly chart, an occurrence that has historically marked the start of a bear market.

Bitcoin’s weekly chart showed that the SuperTrend indicator flashed a bearish signal when it reversed from red to green and moved above the price last week.

This indicator overlays the chart while tracking BTC’s price trend, like the moving averages. It incorporates the average true range in its calculations, which helps traders identify market trends.

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The SuperTrend’s “sell” signal was confirmed after the BTC/USD pair produced a weekly close below the 50-week moving average (MA) on Sunday, a scenario that has historically marked the end of a bull market.

Previous confirmations from these two indicators were followed by 84% and 77% drawdowns during the 2018 and 2022 bear markets, as shown in the chart below.

“The Weekly SuperTrend indicator has flipped red for the first time since January 2023 (end of the bear market),” said crypto analyst Bitcoinsensus in an X post on Monday, adding:

Source: CoinTelegraph