Bitcoin suffered a $10,000 plunge over the weekend, what are the technicals saying now as we get into the new day/week?
Adam outlined a couple of potential reasons for the rout in crypto here but let’s take a look at what the charts are saying in the aftermath and what are the implications now.
The technical picture going into the weekend was rather bullish for Bitcoin as it consisted of a series of higher highs, higher lows since the start of the year.
Has that changed? Not really. The drop yesterday hit $51,300 and did not nudge towards testing the 25 March low @ $50,305. So, technically the chart pattern is still holding although it is less clear now i.e. momentum is weaker.
Adding to that is the break below trendline support levels (white lines) that have been established since January and February trading respectively.
That further dents the upside momentum in the pair but buyers are still hanging in there as they hold above the 25 March low, the $50,000 psychological level, and the 100-day moving average (red line) seen @ ~$48,834.
So, while some of the bullish bias has been scraped, there is still some semblance of upside momentum persisting in Bitcoin price action. Drilling down to the near-term chart:
The bounce today sees price nudge back above the 38.2 retracement level of the recent swing lower. So, that is some encouragement at least after the initial rebound upon the weekend drop failed to take out said level.
But there is still plenty of tests for buyers to try and wrestle back near-term control with the broken trendline support levels (white lines) now acting as resistance levels instead – adding to the key hourly moving averages seen closer to ~$60,152 to ~$60,784.
As such, the rebound so far today while modestly encouraging (since it comes with a few key support levels still in play) doesn’t exactly absolve Bitcoin of further downside pressure just yet as sellers are still keeping near-term control.