Bitcoin fell sharply last Saturday, frustrating many people in the community who still expected progress before halving
One was one of the worst days (09) for the Bitcoin (BTC) price in recent years. Starting from yesterday, just one step from the $ 10,000 mark, Bitcoin fell intraday to less than $ 8000, before a slight recovery.
At some point, the daily candlestick reached almost 20% negative. Those who know Bitcoin cannot say it was out of the blue. However, as we get closer to halving, such a big drop can trigger a panic sell. We’ve already seen what weak hands could do just two months ago on March 12, when Bitcoin lost more than 50% in just one day.
In the past few days, Bitcoin has tried to cross the $ 10,000 mark almost without success. And when he can’t go up any more, he loses momentum and falls.
As previously stated in several places, the real test would be the resistance level of $ 9800 to $ 10,000 (which can be seen in the following weekly chart for several years). Bitcoin will seek to close this week’s candlestick above the $ 8400 level.
BTC / USD weekly since 2014. Source: TradingView
There is good news
Violent movements to one side (upwards) carry violent movements to the other side (downwards). Looking at the Bitcoin chart, he had not seen a significant correction since the V-shaped recovery from the March 12 crash.
So it was expected to fall, and it was likely to be cruel.
As can be seen in the daily chart below, the $ 8000 zone, yesterday’s low, includes the 200 and 100 day moving average lines.
Since crossing the moving average lines on April 29, 2020, Bitcoin has not come down to confirm them as support. In addition, today’s low correlates with the upward trend line, which began to form during the March 12 decline. This line is marked in blue in the graph below.
The question is what will happen from here: whether Bitcoin will stay and not dip below $ 8,000, as things can get very ugly, especially after some selling pressure by halving, which should occur in less than 300 blocks.
Total market capitalization: $ 242 billion
Bitcoin market capitalization: $ 162.3 billion
BTC dominance index: 67.0%
* Details: CoinGecko
Main levels of support and resistance from here
Support and resistance
At the time of this writing, Bitcoin has recovered from the $ 8,000 support zone and is currently trading between $ 8600 support and $ 9,000 resistance.
If $ 8600 is not maintained, the next support could be $ 8400, followed by the $ 8K level, as described above. Further down is $ 7700, which is also the 38.2% Fibonacci retracement level (since the March 12 recovery). Then it’s $ 7400, along with the 50-day moving average line (the pink line).
Above, should the $ 9,000 be dropped, the next resistance levels would be $ 9130 (the 61.8% level) and $ 9400 – $ 9500 (the previous high).
The daily RSI
The RSI reflects the cruel drop; however, the momentum indicator currently maintains the 50 bullish RSI level. The RSI will seek to recover its pace around the levels of 64 to 65, where there is an upward trend line in the medium term.
The sheer amount of long sales would likely mark Sunday’s volume candle alongside last month’s highest volume days. However, there are more than 12 hours from now until the candle closes.
4-hour BTC / USD BitStamp Chart
BTC / USD BitStamp daily chart