As we move into the final month of summer, Bitcoin (BTC) has been proceeding with a long-anticipated correction after a blistering H1 in the markets.
Many traders, even experienced ones, had been caught off guard by the 500% movement between February and June, and seem to be finally getting the healthy retrace they had been waiting for – and we now consider how far and long the retrace might go.
Starting with the weekly candle closing, we see price action clearly pointing down, with some qualifications. The most obvious feature here is the deeply bearish engulfing candle, which completely cancelled out the prior week’s hopeful – if optimistic – spinning top/hammer/doji-ish candle.
However, volume on this bearish week, which was mostly sell volume, was greatly diminished versus the prior week. This could suggest that the downside trend will be limited. Price is also not far, now, from the 21-week exponential moving average (EMA), which has historically held Bitcoin retraces during broad uptrends.
Moving to the 3-day chart, we see a mostly bearish outlook, especially on the indicators: RSI is trending down on lower highs and lows; and both MACD and histogram indicators are clearly bearish. Here, it is hard to imagine that the present correction could be over in the short term – that is, except for the weak sell volume.
The daily (below) is little different, with support at $9,500 seeming to suspect Bitcoin in midair. A very faint uptrend on the histogram is just about the only clue of strength, and taken on its own it says very little. RSI is confluent with bearish looking price action.
All of the typical EMAs on this chart have been lost, and the short term trend looks down.
Based on these charts, it seems that $9,500 may soon be lost. The next serious support should start coming in at about $8,700, and from there down to the high 7’s. This zone is quite likely to hold, as it marks an acceptable level for a retracement during an overall Bitcoin bull market – which we are as of now definitely still in, according to the charts.
The coming week or weeks should be interesting in this regard, with the potential to confirm an overall bull market that could last into 2020 at least.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
