Bulls Are Losing The Strength: The Long-Legged Doji Rules Bitcoin
On the technical 24-hour chart of the price movement of Bitcoin, the so-called “long-legged Doji” appeared. This is a Japanese candle, which is formed when supply and demand in the financial market become almost equal. A long-legged Doji occurs at a time when the bull trend does not have enough strength and can at any moment reverse in the opposite direction.
This technical model can significantly affect the flagship cryptocurrency exchange rate. If you take into account previous experience, after the formation of the long-legged Doji, the bears pulled the championship on themselves, leaving the bulls aside.
What to expect from a long-legged Doji?
Previously, the bulls demonstrated their strength and were able to get Bitcoin out of the crisis that arose on March 12. Despite the high volatility in March, by the beginning of April, the flagship cryptocurrency shook itself off and headed for an uptrend. As a result, under the influence of bulls, the price of Bitcoin rose by 150% within 3 months.
Today, Bitcoin is close to the cherished figure of $10,000. The struggle to overcome this milestone lasted for the past month, but it did not end in a final victory. In particular, the long-legged Doji indicates that trading activity is shifting towards the sale, and not the purchase of a crypto asset.
This Japanese candlestick model indicates that the bulls remain weak and lack the strength to breakthrough. Despite the optimistic forecasts of some cryptanalysts, likely, Bitcoin will not be able to overcome the resistance level of $10,000 so far. The appearance of a long-legged Doji serves as a signal for traders about the change in the value of the asset in the short term and the need to adjust the trading strategy.
Are the bears turning the price of Bitcoin in the opposite direction?
The long-legged Doji has never before brought good news for Bitcoin. This indicator indicates that buyers are losing control in the cryptocurrency market. Similar processes have repeatedly happened in the history of Bitcoin. In particular, this model almost always appeared on the technical chart after the crypto-asset reached a local peak.
One such example is the Bitcoin rally in August 2019. After reaching a price peak, a long-legged Doji formed on the chart. The result was not long in coming: in September, the price of Bitcoin fell sharply to a minimum. Also, this model of the Japanese candle formed shortly before the collapse of Bitcoin in March.
Thus, cryptanalysts indicate a greater likelihood that the bears will soon win again and the price of Bitcoin will go down.