Until yesterday, Bitcoin (BTC) was looking stable in an MTF correction with a slight tinge of downtrend. But volatility has since increased, and the MTF outlook is now looking to include a more extensive downtrend that will more aggressively test what remains an HTF uptrend – for now.
Starting on the daily, we see that the very tight and bullish market structure holding mostly above $9,560 finally gave way yesterday, with the daily candle crashing and closing below it for the first time since 5 Feb. The contentious market action around the 21 EMA finally ejected the leading crypto from this area.
The local market structure is pretty much done for, unless we see a powerful reversal within the day such that we can call the whole thing a fake-out. Assuming that doesn’t happen, we are likely to see the rest of the blue zone tested. This is a thick support zone, and there is a good chance for the MTF downtrend to find a bottom somewhere within there.
If we step back to the 3-day chart, we can see that this downtrend is not yet threatening the larger uptrend. The 1.5 month rally from the start of 2020 was due for a correction, and even with this latest drop price is only engaging the first major level of the Fibonacci retracement scale – .382.
This level is confluent with the important $9,100 level, which served as an important inflection point during the 2019 bull market. There is plenty of support around here, all the way down to $8,700.
But things, admittedly, might get worse as the weekly indicators are not looking good. The RSI has dove down to the bottom of the gray support band; and this band has held all Bitcoin corrections during every major HTF uptrend in its history. If this level doesn’t hold, the leading crypto might be in trouble.
The histogram is also dumping hard to the downside, looking rather catastrophic at the moment. But here, we must remember that the week is not even half over, and there is plenty of time for these indicators to be completely changed within four days.
In sum, Bitcoin is still within acceptable limits for its HTF uptrend to hold. But the indicators are looking stretched, and bulls should step within the next few hundred dollars if they want to secure the limits of that larger uptrend.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
Featured Image Credit: Photo via Pixabay.com