As we can see from the Weekly chart, Bitcoin broke the $6000 support level which had been in place since January 2018 and has now fallen around 30% to $4500 during this past week. We had a bearish cross (9 period SMA over the 26 period SMA) in June and the price has been falling since.
It is important to note that the price of Bitcoin fell below the 100 period SMA (Blue line) for the first time since January 2016. The $4500 level which Bitcoin is currently trading in, correspond with the 0.786 fib level and the highs formed in September 2017. If Bitcoin continues to fall, the next level of support will be around $3000, at the 200 period SMA and the 0.88 fib level.
On the logarithmic scale, a parallel channel connecting the two tops (2014 & 2018) and projected in the bottoms, would have us dropping to around $3000 by early January, where there is a lot of support by previous highs (green and red arrows) and the 200 period SMA)
On the daily timeframe, the potential reversal zones are outlined by the green rectangles. It is worth noting that the RSI (Relative strength index) is currently at 10, indicating extreme oversold conditions, and an RSI level where Bitcoin has never been at before.
On an even shorter timeframe, the 6hr, we have a bit of bullish divergence developing, which together with the $4500 level of support could provide bulls with some strength for a bounce, however, due to the extreme volume in drops, I think that right now this scenario is unlikely.
* Price broke strong support at $6000.
* Price is currently at $4500 support (previous high + 0.78 fib level).
* The next level of support is at $3000 (previous high + 200 week SMA + 0.88 fib level).
DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.
Featured Image from Shutterstock.
11/20/2018 / 15:54:02 Source: blokt