Bitcoin (BTC) has finally reversed, after yesterday briefly achieving a new local high very near $14,000. The leading crypto is now testing a confluence of several new support levels just under $12,000, but threatens to dip even further.
The 4 hour chart, below, gives us the general lay of the land. The leading crypto has, at time of writing, retraced up to 20% and briefly below the important block of support around $11,600. This vertiginous fall was stopped exactly at $11,200 on the Bitstamp chart.
The red block of support depicted is important, being the location of the 0.5 Fibonacci retracement level from 2017-18; being an important swing point for the 2018 bubble pop; and closely intersecting the local linear uptrend line.
Should this red block of support give way and flip to resistance, the next one is likely to hold. Located around the $10,800 area, this block of support will keep Bitcoin in its new 5-digit area code. The 55 exponential moving average line, a widely watched average, should also help stymie the bloodletting.
Zooming into the hourly chart, it seems doubtful that this dip has ended. We’ll likely need to see some bullish indicators on the hourly RSI before we can begin to feel comfortable that buyers are stepping in. Another leg down with a higher low on the RSI is probably needed.
It has certainly been a battle to hold the present level, though, with what looks like a hammer candle painted on the bottom of the last dip. Stabilizing at $11,600 would be very bullish in the medium and long term – but then, so would $10,800.
Is There A ‘Why’?
Crypto (and traditional financial) analyst Alex Kruger weighed in on Twitter as to the reasons for Bitcoin’s astonishing performance lately.
The cause is simple: aggressive buyers crossed the bid-ask spread and overpowered both passive and aggressive sellers. Based on price action, there were aggressive buyers with deep pockets in action last night. There was no specific trigger known to anyone outside of them.
— Alex Krüger (@krugermacro) June 26, 2019
Although he points to several generally bullish factors, no specific “trigger” has caused the runup, he said. Quite simply, aggressive buyers with deep pockets were able to slice through the order books.
Clearly there is no way to say definitively one way or the other – but Bitcoin’s runup has been a juicy enough target for a correction all on its own.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.