1 Day Chart
Bitcoin price continued to fall throughout yesterday, before finding support at $6650. This is a major level of support, indicative of the swing lows formed previously. Should this level hold then we have seen the formation of a triple bottom, which suggests that the bears are unable to push price lower.
As you can see on the chart below, a retest of $6550 would be the third time that this level has offered support. Furthermore, the long term trendline from early 2017 has reached a confluence with price action. Will this trend be maintained?
On the short-term chart, you can see how price action recovered slightly yesterday before plunging down to the support level at $6550, where it is currently trading. The chart is bearish at the moment, but a bounce may be on the cards based off the support level. However, should support fail, then significant short opportunities will present themselves.
The concerns that I have had for the past few months have now been met, should we not see a reversal occur at or above $6550, then we could be in for a deep bear market, possibly testing the $4900 level. As it stands currently, price is trading below the 50-week moving average. The next major bearish milestone would be the crossover of the EMA8 and EMA20 with the MA50 on the weekly chart.
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Ricki specializes in the field of wealth management with a focus on holistic financial planning. He has a keen interest in the investment fields of property, technology, precious metals and cryptocurrencies. Ricki also holds a Masters degree in Science from the University of Stellenbosch.
Important Risk Notice:
Crypto Currencies are not defined as securities in terms of the Financial Markets Act, 2012 (Act No. 19 of 2012). The regulatory standards that apply to the trading of securities, therefore, do not apply to virtual currencies. Because virtual currencies are not regulated, users are not protected and are at the risk of losing money. Transactions are also irreversible. The price of virtual currencies is based on investor sentiment and can rise rapidly, thus attracting investors looking for very high returns from investments. However, the prices of virtual currencies tend to be very volatile and can drop as quickly as they rise. This may encourage speculative behaviour, which in turn spurs more volatility. Financial risks are, therefore, limitless and claims cannot be made for such losses.