Skip to content Skip to sidebar Skip to footer

Bitcoin (BTC) Reaches Crucial Support At $7.4K, Larger Decline In Play?

  • Bitcoin price is down 6% and tested $7,400 (discussed in the medium term outlook) against the US Dollar.
  • The price is showing no signs of a strong recovery and remains at a risk below $7,800.
  • There is a key contracting triangle forming with resistance near $7,650 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • A daily close below $7,400 could open the doors for a push towards $6,500 (as discussed in the recent medium term outlook).

Bitcoin price is declining heavily below $7,800 and $7,600 against the US Dollar. The $7,400 support holds the key, below which BTC could eye a test of $6,500.

Bitcoin Price Analysis

In the recent medium term outlook, I discussed the chances of bitcoin declining further below $8,000 against the US Dollar. The first major bearish target was $7,400 and BTC price did test the same in the recent decline.

After struggling to recover above the $8,000 level and the 100 hourly simple moving average, there was a sharp decline. The price is down around 6% and it broke many supports near $7,800 and $7,600.

Finally, the price tested the first major bearish target was $7,400 and a new monthly low was formed near $7,402. The price is currently correcting above the $7,500 level. Moreover, it traded above the 23.6% Fib retracement level of the recent drop from the $8,107 high to $7,402 low.

However, the price is struggling to gain strength above $7,640. Additionally, there is a key contracting triangle forming with resistance near $7,650 on the hourly chart of the BTC/USD pair.

If there is an upside break above $7,640 and $7,650, bitcoin price may perhaps test the next resistance near $7,755. It represents the 50% Fib retracement level of the recent drop from the $8,107 high to $7,402 low.

The next major resistance is near the $7,825 level and a connecting bearish trend line on the same chart. Therefore, the price must climb above the $7,825 and $8,000 levels to move into a positive zone.

Conversely, there could be another breakdown below $7,500 and $7,400. Should there be a daily close below $7,400, the price is likely to accelerate further lower. An initial support is near the $7,200 level. Having said that, the price could even aim the $6,500 support area (the next major bearish target).

Looking at the chart, bitcoin price is trading near a major support at $7,400. Thus, there are chances of a decent recovery above $7,800. On the other hand, the price could aim a larger bearish wave below $7,400.

Technical indicators:

Hourly MACD – The MACD is slowly moving in the bullish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is currently recovering and is above the 30 level.

Major Support Levels – $7,500 followed by $7,400.

Major Resistance Levels – $7,640, $7,825 and $8,000.

The post Bitcoin (BTC) Reaches Crucial Support At $7.4K, Larger Decline In Play? appeared first on NewsBTC.

NewsBTC , 2019-11-22 06:00:29 ,

Source link

Leave a comment

NewsBlock © 2019 - 2020 All rights reserved.

NewsBlock © 2019 - 2020. All rights reserved.

While Bitcoin’s price seemingly moves without rhyme or reason — collapsing by dozens of percent and embarking on face-melting rallies on a whim — the cryptocurrency market is filled to the brim with fractals.

Related Reading: Analyst: Bitcoin Price Likely to Fall to Low-$8,000s as Chart Remains Weak

A brief aside: A fractal, in the context of technical analysis and financial markets anyway, is when an asset’s price action is seen during a different time. This form of analysis isn’t that popular, but it has proven to be somewhat valuable in analyzing Bitcoin.

One recent fractal popularized by a well-known cryptocurrency trader is implying that BTC is going to return to the low-$7,000s in the coming days.

Bitcoin Fractal Implies Retracement to Low-$7,000s

A well-known crypto trader going by “Tyler Durden” on Twitter recently posted the chart below, which shows that a Bitcoin price fractal may be playing out. The fractal has four phases: horizontal consolidation marked by one fakeout, a surge above the consolidation phase, a distribution, then a strong drop to fresh lows.

If the fractal plays out in full, BTC could reach the low-$7,000s again, potentially as low as $7,100. This would represent a 20-odd percent collapse from the current price point of $8,800.

It isn’t only a fractal that is hinting Bitcoin has the potential to visit its lows. As we reported on Saturday, Bloomberg believes that if the GTI Vera Convergence Divergence Indicator flips red, a downtrend could push the cryptocurrency back to $7,300.

Related Reading: Stephen Colbert Pokes Fun at Bitcoin in Monologue: Mainstream Gone Wrong?

Can Bulls Step In?

But again, many believe it is irrational to have such bearish interpretations of the cryptocurrency’s chart at the moment. As reported by NewsBTC earlier, Popular crypto trader Mayne recently noted that the “people waiting for $6,000” are irrational. He quipped that Bitcoin retracing and consolidating after its fourth-biggest bull move in history ($7,300 to $10,500, a 42% gain) is perfectly par for the course, but noted that it’s totally possible we can go lower from $8,800.

The medium-term technicals support this.

Trader and CoinTelegraph contributor FilbFilb found that by the end of November or start of December, the 50-week and 100-week moving averages will see a “golden cross,” which he claims is far more significant” for the Bitcoin market that other technical crosses.

Also, a Bitcoin price model created using Facebook Prophet machine learning found that the leading cryptocurrency is likely to end the year at just over $12,000. What’s notable about this model is that it called the price drop to $8,000 months in advance, and forecasted a ~$7,500 price bottom for BTC.

To put a cherry on the cryptocurrency cake, Crypto Thies observed that when Bitcoin bottomed at $7,300, it bounced decisively off the 0.618 Fibonacci Retracement of the move from $3,000 to $14,000, which correlates with the two-week volume-weighted moving average. He added that summer 2019’s consolidation was marked by Bitcoin flipping major resistances into support levels, implying that a bullish reversal and subsequent continuation is likely possible in the coming weeks.

Featured Image from Shutterstock

Nick Chong , 2019-11-10 12:00:38

Source link