You may have noticed, Bitcoin (BTC) has taken a serious turn down in the past two days, turning what was a bullish looking sideways consolidation into an extensive correction. However, we’ll emphasize here that, even after the past two days, there is still an argument for the HTF uptrend holding.

We can begin on the daily chart, and note that the thick support zone in blue has basically been taken out in a single day of frantic selling. The 55 EMA did not even form a speedbump on the way down, but the important 200-day moving average is at least stopping the drop for now.

200 SMA to hold?BTC chart by TradingView

If Bitcoin can close the day above the 200, and maybe form a reversal candle today, we might have reason to hope for a strong countertrend tomorrow still within the support zone.

Moving to the 3-day chart, we can see that, despite the heavy selling, Bitcoin is still not in an emergency situation with respect to the HTF uptrend. Yesterday’s selling has brought the crypto into the .5 Fibonacci range – not even into the “Golden Pocket” area at .618.

Looks bad but still plenty of safe room leftBTC chart by TradingView

The crux of this is, if we can find support anywhere around this area (and likely consolidate there), there will be no existential threat to the larger uptrend.

Finally, moving to a 4-hour chart, we see a heavily oversold Bitcoin RSI but no divergences to latch onto at this time (nor on the daily). Although the indicators telegraph that we are likely to see some short term upside today, we are also likely to see more downside after that with $9,100 now serving as a viable sell target for a relief rally.

Probably need another leg down to start bottom formingBTC chart by TradingView

An RSI divergence on this timeframe would help us be more confident that the selling may be coming to an end, but we’ll need another leg down or a double bottom to occasion one.

Bitcoin’s MTF outlook is looking more extensive if not necessarily “worse”: early 2020 was very bullish and the market was frankly overheated, and this more extensive corrective move could end up helping BTC in the long run. But, the HTF indicators are starting to be challenged (not shown); bulls should step in this week to make sure they don’t get too scary.

The views and opinions expressed here do not reflect those of and do not constitute financial advice. Always do your own research.

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