Bitcoin Shows Signs of Weakness in Recent Trading

Bitcoin continues to look heavy among all assets. Friday's selloff was followed by a modest rally, but bulls need this to turn into a higher low. For now, the tape suggests caution.

Looking at Bitcoin's chart, there's a pretty dramatic bar on Friday.

What's particularly notable is that it has the same volume as previous bars in the chart, yet the extension of the spread is dramatically larger compared to what came before. This reveals something important: the price definitely moves easier down.

Bitcoin had one of the better rallies in the trading range, yet it did not overcome the resistance. Immediately after, it moved strongly out of position and down.

Could This Be a Potential Spring?

If this were a potential spring, the ideal scenario would be to see an immediate move up with some intrusion into a previous bar, followed by a test that would not go deep.

However, there is still uncertainty in the current setup, raising the question of whether Bitcoin might have a little bit more pressure at this point.

A couple of things stand out about Bitcoin's current behavior. First, volatility is increasing throughout, with higher highs and lower lows developing. Second, there's a very sharp break off the upthrusting action that goes all the way down to the support level.

The bounce Bitcoin has gotten is much more muted than the bounce in gold after Friday's selloff. Because there's no lift in this bounce, this could be a characteristic of Bitcoin being on the ice.