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BTC is again testing key support
BTC is again testing key support and resistance zones, and analysts believe the long-term outlook remains bullish if Bitcoin can close above $63,000.
Cryptocurrency traders are distraught and puzzled after Bitcoin’s sharp drop in value
The sharp drop in BTC triggered a massive sell-off in the market, sending almost all of the top-200 tokens into the red on November 16.
Data from Cointelegraph Markets Pro and TradingView shows that the bitcoin price fell to $58,609 before finding buyers who pushed it back up to the $60,500 mark.
Here’s what some traders and market analysts are saying about the recent move lower, and whether it’s just a tremor or a sign that the clouds are gathering over the market.
BTC explores support and resistance levels
Options trader and pseudo Twitter user “John Wick” offered his take on BTC’s daily price movement by publishing the following chart showing some important support and resistance zones.
According to Vick, bitcoin is exploring a resistance zone near a new all-time high and points to the possibility of falling into the $58,000-$59,500 range, similar to the movement seen in the early hours of trading on Nov. 15.
Similar observations were made by market analyst and pseudonymous Twitter user “Rekt Capital”, who posted the following tweet zooming in and looking at BTC price action on a monthly chart.
As the analyst noted, the price action on November 16 was a retest of the monthly support/resistance level at $58,700. Now that BTC has successfully rebounded near the $61,000 monthly level, a bullish trend could be in store in the coming weeks if the price manages to close the month above that level.
The probability that $54,000 will be reached.
Market analyst Michael van de Poppe expressed a more balanced viewpoint on recent price developments, publishing the following chart of the possible trajectory of the BTC price over the next week.
van de Poppe said,
“So far, so good for bitcoin. Rebound on support, but still need to break some crucial areas, which hasn’t been done yet. Let’s start with that. The $63,000 level is important. Failure to break through this level [means] a continuation of the bearish momentum.”
According to the chart presented by van de Poppe, if the downward trend continues, the price of BTC could fall to the next support level at $54,000.
Fractal patterns suggest an approaching price rally
Cryptocurrency analyst Allen Au posted the following 2013, 2017 and 2021 bitcoin charts on Twitter in response to concerns that the $69,000 mark is the top of the cycle.
According to the analyst, the latest decline is not a cycle top, but is consistent with the wave 6 movement seen in previous cycles. This means that “if a low is reached, BTC may soon move into wave 7”.
If the described sequence of waves comes true, the top of wave 5 could reach $69,000, the bottom of wave 6 could reach $58,600 with the possibility of dropping to $53,000, and the top of the cycle could be between $190,000 and $260,000, which will happen in December 2021.
The total cryptocurrency market capitalization currently stands at $2,651 billion, with bitcoin holding a 43.2% share.
Bitcoin looks heavy on short-term technical charts after failing to hold above the $58,000 mark early on Thursday. At the time of going to press, the crypto-currency was trading near $57,350.
- In the chart above, the Relative Strength Index (RSI) has separated from the price rise since October 6. The indicator’s negative divergence indicates a loss of upward momentum and the possibility of a pullback.
- The nearest support is at the $54,000 level, where buyers have been steadily coming forward over the past week. A fall below this level would result in a drop to $50,000.
- A move above the daily highs around $58,500 is needed to cancel the bearish RSI divergence and pave the way for new highs above $64,801.
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