Bitcoin has broken bearish below the critical $8,000 level, after failing to retrace back to its support at $8,200 (0.382 fib level) earlier today.
The wary BTC market has responded in typical fashion, exiting into pegged value assets at the first sign of trouble. This has resulted in the asset’s price cascading down to the lower 0.236 fib level at $7,800, where now a great battle is waging between bullish investors trying to prop up the coin’s value and a torrent of panic sellers jumping ship.
For now, it looks as though the bulls’ tireless work is having some effect on the price action; as green candles begin to flicker along this new support area. Is it too early to hope for a recovery? Or will the wave of FUD overwhelm the orderbook and continue to submerge BTC?
Let’s dive in.
Over 4hr candles, we can see that Bitcoin has managed to find the lower fibonacci support at 0.236, after experiencing steep selling pressure at the 0.5 fib level. Rather worryingly, we can also observe a bearish trifurcation between the 50, 200 and 1,200 EMA’s which strongly indicates a reversal in market sentiment.
This is seriously unusual trading behaviour to be witnessing at this time of year, given the long-standing history of BTC’s bullish performance after a Consensus conference.
According to this data, we should be expecting at least double figure gains right about now - not breaking below key support areas!
That being said, bullish traders are holding down the fort; with short-term momentum indicators favouring a recovery. Unfortunately though, we can’t know for sure if the rebounding price action will continue for much longer, but let’s take a look at the activity closer, over 30min candles.
Combining the MACD and RSI indicators we can see a fairly unifying trend where Bitcoin was briefly oversold, which undoubtedly attracted this new bullish support.
More often than not, we see a lot of short-term scalpers take advantage of oversold assets and ‘buy the bounces’ to bank a quick profit. Whether this current uptrend will last will depend greatly on the quality of the bullish investors involved in this recent support.
Interestingly, the candle trend is predominantly bearish but momentum indicators are starting to diverge against the market (yellow arrows). This could simply be recognition of the rebounding price action, or be an early reversal clue.
The ichimoku indicator is projecting a resisting kumo cloud (red) ahead of the current price action, asserting a bearish continuation, but if the candles begin to pass through the cloud (white arrow) then this will also be a good indication of a reversal.
Bitcoin (BTC) Prediction
As always, predicting Bitcoin’s movements is virtually impossible given the global spectrum of influences that can affect the asset’s price at any given time.
Broader indicators are strongly indicating a bearish decline, particularly with the 200 EMA (red) crossing below the 1,200 EMA (yellow).
Short-term indicators are slightly favouring the bull traders at this moment in time, but we can’t know for certain if this is the signs of a reversal or simply a brief rebound off the new support.
If we see candles holding below the 0.236 level, inside the red area, then we could potentially witness another test of the psychological $6,000 if confidence continues to depart from Bitcoin over the rest of this month.
Until then, I’m sure we’ll all be hoping for a late post-Consensus surge to re-ignite this falling market.
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