After briefly finding some stability above a key support zone, volatility has returned to the price of Bitcoin (BTC) on the eve of some important milestones in its price history.
The push to $14k was followed days ago by a full 25% selloff, which was in turn followed by a powerful counter-rally back to the low 12s – making it to the 0.618 Fibonacci retracement line of the local range, showing plenty of strength.
But Bitcoin has now broken down below this critical support zone (red) at $11,800-600, and the important 55-hour exponential moving average (EMA). This zone marked important price history from 2018, as well as the 0.5 Fibonacci retracement line from the entire bear market.
The leading crypto is currently being bought up on the 15-minute chart, above; but it is being bought on unimpressive volume and a flagging RSI strength. The current block of support ends at $10,500, and Bitcoin could very well test that low end.
The obvious and much larger question is, however, which direction will the trend take in the medium and long term?
Two very important candle closings will occur today, and help us divine the answer to this question: both the weekly and monthly candles close at midnight tonight (UTC time), and they are especially important closings given how incredible June’s price action was.
Let us assume for the sake of argument that they close where current price is, at about $11,2000.
On the weekly side, we see a deep sell wick on what looks like a typically bearish “shooting star” candle. Price has far outpaced the typical 9 and 21 EMAs, which cannot last forever, and may suggest a period (finally) of correction for Bitcoin.
On the other hand, both RSI and MACD/Histogram indicators on the weekly chart remain bullish with, at present, little to no diminishing of strength versus previous peaks.
Looking at the gigantic monthly chart, one of the first things we may notice is the similarity of the current parabolic uptrend, and the late 2017 blow-off top parabolic conclusion. This might give us cause for serious concern, if not for the fact that we are more than likely within an entirely different market context than we were in 2017.
We should make no mistake, Bitcoin’s long term trend looks very bullish. Over the summer months that follow, it will take a lot of losses, and breaking of key levels, to prove otherwise: the burden of proof is now very much on the bears to demonstrate that the trend is in fact down.
CryptoGlobe will evaluate Bitcoin’s long term prospects more thoroughly tomorrow, after the important weekly and monthly closes solidify more price information.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.