As we stated yesterday, Bitcoin was waiting for the next major move, which came just hours after our analysis was published. We also noted that the chances of a breakdown are much higher than the ones of a breakup.
The $3600 support level was broken sharply, in less than an hour, as BTC marking exactly $3480 as the daily low. The last is the support level we mentioned yesterday.
From there, we’ve seen a slow positive correction: Yes – Bulls Walk Up the Stairs-Bears Jump Out the Window.
Fun fact: Exactly 4 years ago, the bear market of 2014 had ended with this capitulation candle with a low of $152.
Looking at the 1-day & 4-hour charts
- Following the breakdown of the $3600 level, the next support area is $3480 – $3500 (which is also the daily low). This is a crucial support zone. Breaking it down could send Bitcoin to re-test prior support at $3300, $3200 and the 2018 low of $3120.
- From the bull side, Bitcoin is expected to encounter a descending trend-line during the next hours (~$3550). The further target is the $3600 support turned resistance level, along with $3700 resistance (4-hour chart’s 200 days moving average line and 1-day’s 50 days moving average line).
- Some relief signs: We should watch the daily chart’s Stochastic RSI oscillator which is about to cross over at the oversold area. This could lead to a positive correction for the upcoming days. However, it hadn’t crossed yet.
- The Daily Chart: The RSI indicator broke down the support level at 43. It seems like this area will be tested again, from below, as resistance.
- Trading volume: this field proves how easy it is to move this market. The past two days had a low amount of volume. This might also be due to the weekend.
- BitFinex’s open short positions had a slight gain to 23.5K.
BTC/USD BitStamp 4-Hour chart
BTC/USD BitStamp 1-Day chart
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Cryptocurrency charts by TradingView.