‘Ominous Sing’: Bitcoin Suddenly Plunges Lower

Earlier today, the price of Bitcoin dropped to an intraday low of $86,673 after experiencing extreme volatility, according to CoinGecko data. The flagship coin is currently trading at $87,208 after paring some losses. 

An ominous sign 

In a recent social media post, prominent trader Josh Olszewicz has warned that Bitcoin could be on the cusp of another correction. 

Using the Ichimoku Cloud indicator, Olszewicz has noted that Bitcoin is currently on the verge of breaking down into the cloud on the weekly chart. 

This essentially means that Bitcoin’s uptrend is ending, and the cryptocurrency could be on the verge of dropping to the bottom of the cloud. 

The chart shows two lines above the current price. The price dropping below these lines is often the first signal of weakness before hitting the cloud. The fact that Bitcoin is now below both lines should be rather concerning for the bulls. 

Another bearish factor 

The trader has identified tax harvesting as yet another major bearish factor. 

Tax loss harvesting is a strategy where investors sell assets that are at a loss before the end of the calendar year in order to be able to offset capital gains taxes on other profits.

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Olszewicz expects tax-harvesting to create more artificial selling pressure in December. 

A bear flag breakdown 

The flagship cryptocurrency could be on the verge of a bear flag breakdown. 

This pattern looks like a flag pole followed by a flag, which represents a period of slow sideways. The breakdown occurs when the price drops to the bottom of the flag.