This was expected. Following a phenomenal week in which the price of Bitcoin rose from $9,000 to almost $14,000 without stopping, Bitcoin bears stopped the train, at least for now.
In a session of violent drops, Bitcoin claimed nearly $11,200 as its new low. Is this a change of momentum? Is the bear market here again? In my opinion, no. Corrections are part of the way up, as mentioned previously, especially to do so in a healthy way.
As can be seen on the 4-hour chart, Bitcoin ended its bloodbath at the significant 61.8% Fibonacci retracement level, along with the mid-term ascending trend line (marked in orange). As long as the bottom remains there, the bulls can’t complain, in my opinion.
So Far, So Good
Support/Resistance: Bitcoin’s price fell all the way to the $11,200 level. Yes, that was the recent resistance/high from days ago. If Bitcoin breaks further down, the bears should expect to see it retest the $10,600 support level before reaching the $10,000 level which was quickly and easily broken on the way up. Further below lie $9,800 and $9,400.
From above, Bitcoin again faces the $12,000 – $12,170 area (38.2% Fib retracement level) as its closest resistance zone. The next level is around $12,500 followed by $13,000. Breaking the recent 2019 high at $13,880 (along with the $14,000 area) would likely send Bitcoin to the $15,000 zone since there is not much resistance along the way, including the next targets of $16,400 – $16,650, $17,400 (the high from January 7, 2018), $18,000, $19,300 and $20,000 – the current all-time high from December 2017.
Daily chart RSI: After reaching the overbought area and the aforementioned resistance from yesterday in the 88 – 90 RSI area, the correction came, and the RSI dropped sharply to the support area at 68, still on the bullish side. Every time Bitcoin reaches that RSI level, a severe correction takes place.
Bitfinex open short positions: After the amount of shorts climbed to a monthly high at 29.7K BTC, the price correction reduced the number a bit to a current amount of 29.2K BTC.
BTC/USD Bitstamp 1-Week Chart
BTC/USD Bitstamp 1-Day Chart
Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.
Cryptocurrency charts by TradingView.