Wall Street starts to see weakness emerge in bitcoin charts

Noting that “a chart is a chart is a chart,” Tallbacken Capital Advisors’s Michael Purves — weighing in on crypto for virtually the first time — sent a note Wednesday with a technical analysis of the coin’s trading patterns.

Purves’s decision to comment is the latest sign that Bitcoin has become too big for Wall Street to ignore.

strategists led by Nikolaos Panigirtzoglou noted that the last few times they witnessed such negative price action in Bitcoin, buyers returned in time to prevent deeper slumps.

If the largest cryptocurrency isn’t able to break back above $60 000 soon, momentum signals will collapse, the strategists wrote in a note Tuesday.

The likelihood it will happen again seems lower because momentum decay seems more advanced and thus more difficult to reverse, they added.

Should Bitcoin be unable to breach its short-term trend line, it could move lower and test the $50,000 level, about a 10% decline from where it’s currently trading.

Tallbacken’s Purves, who says the coin’s 2017 breakout and subsequent decline is a useful case study, also points to Bitcoin’s daily MACD signal — or the moving average convergence divergence gauge — which has turned bearish in the intermediate-term.

Smaller and alternative coins that had run up in recent days also suffered declines, with Dogecoin — the poster-child for crypto risk-taking — declining roughly 15% to trade around 31 cents.

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