As we explained in our last Bitcoin analysis, Bitcoin is trading above the Ichimoku cloud since it was trading around $11,000. The last time that price broke down below the cloud support was when it was trading around $10,500. Since then price has made an impressive rally to $65,000 and as we warned, price is now turning lower.

Today price is breaking below the Daily Cloud support. This is an important bearish signal. This implies that a correction period starts for Bitcoin. After such break downs we usually see more selling and then a back test of the cloud from below. So even if Bitcoin falls towards $40,000 it would not be a surprise to see a bounce higher towards $50,000 to test the cloud from below. On thing is for sure, this is not a short-term pull back, this is not a short-term correction. We will most probably enter a multi week period of consolidation and correction lower for Bitcoin prices. Our first target area was at $40,000. Traders need to be very cautious.