Bitcoin has moved into dangerous territory. The bears have the upper hand as a move further down to $100,000 is starting to become a distinct possibility. Will the $BTC price take the plunge, or will a last-ditch bounce save the day?
How far down will this reversal impulse take $BTC?
Source: TradingView
The 8-hour chart for $BTC shows how the price has been staying in the top half of the descending channel, except of course for the huge fakeout that resulted in the all-time high. That said, the price has just confirmed below a major trendline. It now remains for the price to come down to the full extent of this reversal impulse, whatever that may be.
The $109,000 horizontal support has failed, at least on this time frame, and now the $BTC price is testing horizontal support at $107,400. More horizontal support can be found at $105,600, and then the mid-point of the channel should also act as a good support, as it has done up to now.
The last line in the sand is probably $98,000. This level also concurs with the bottom of the channel. In order to save the bull market, the price would need to bounce hard and fast from there.
$98,000 an obvious level for a bounce?
Source: TradingView
Zooming out into the daily time frame it can be seen that the $BTC price could be about to drop through the 200-day SMA. In itself, this isn’t the end of the world for $BTC given that the 200-day SMA has been breached for an extended period three times so far in this bull market. That said, it is another support level that could fall by the wayside.
As one can see, possibly the most obvious level for a bounce is in fact the $98,000 horizontal support. A candle wick down to the bottom of the descending channel would perhaps provide some balance and symmetry into the bargain.
Notwithstanding, this kind of a move would probably spread fear and terror throughout the crypto market. Not just any last vestiges of leverage could be expunged from the market, but quite possibly many spot positions would also be sold – a likely environment for a huge rally back to the upside …
50-week SMA is the definitive bull market support
Source: TradingView
The weekly chart view for the $BTC price provides some crucial information. The main standout here is the 50-week simple moving average (SMA). This average has provided support to the bull market all the way through up to now. Only the odd short candle wick has pierced through it at what were very difficult, but pivotal times for the Bitcoin bulls.
If the 50-week SMA is to continue to provide that last support, it would suggest that the $BTC price won’t in fact go all the way down to the $98,000 level. $100,000 might just be a possibility if a candle wick came down that far.
Of course, there is the possibility that the 50-week SMA could provide the signal that the bull market is over, should the price close and confirm below.
One last factor to consider is the Stochastic RSI. The negative price action since the all-time high has helped to bring the indicators almost down to the bottom. If one looks left at the last time this occurred, one can observe the near 70% rally that took place. Things may be balanced on a knife edge, but they may be far from over yet.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
