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Bitcoin continues correcting despite bullish market sentiment
3 min read
Updated: Nov. 7, 2019 at 2:51 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
The recent volatility of Bitcoin has caught many investors by surprise. As many of them continue betting that the pioneer cryptocurrency will go up, the fact is that it continues correcting. As a result, this short technical analysis will evaluate how low could Bitcoin go if the bearish trend continues.
Bitcoin Technical Analysis
Based on the 12-hour chart, Bitcoin is trading inside a descending parallel channel. Recently, BTC bounced from the bottom to the middle of the channel and was not able to reach the top. Now, everything seems to be indicating that it will pull back to the bottom of the channel once again.
A correction to the bottom of the descending parallel channel, which is where the 50 percent Fibonacci retracement level is sitting at, is extremely possible. As the 38.2 percent Fibonacci retracement level seems to be getting weaker now that it has been tested on three different occasions, the drop could be imminent. Thus, the chances for a further decline have increased and the next support level is around the 50 percent Fibonacci retracement zone between $8,700 and $8,500.
The moving averages on the 12-hour chart tell a similar story. Since Bitcoin appears to have broken the support given by the 150-twelve-hour moving average, the next level of support is given by the 200-twelve-hour moving average, which is sitting around $8,700.
It will be very important for Bitcoin to hold around the 200-twelve-hour moving average. Moving below this support cluster will also indicate a break of the descending parallel and 50 percent Fibonacci retracement area. If this were to happen, BTC could likely plummet to another 17 percent to $7,230, which is where the 61.8 percent Fibonacci retracement level is at, and will represent a nearly 50 percent correction from the recent high $13,870.
It is worth noting that the 61.8 percent Fibonacci retracement is considered the ‘golden’ retracement area. This Fibonacci retracement level represents a pivotal point for BTC’s trend. Usually, a pullback to this zone is an indication of an exhaustion point. A correction, like the one just experienced, to these levels will suggest a rebound. However, a break below the golden retracement level is a signal of a trend reversal from bullish to bearish.
Bitcoin Overall Sentiment
Despite the bullish sentiment that can be seen in the cryptocurrency market, it appears that Bitcoin may have more legs down. Based on this short analysis of BTC’s 12-hour chart, everything seems to indicate that will indeed test the bottom of the descending parallel channel before any major upswings.
Nonetheless, the resistance given by 100-twelve-hour moving average could be used as an indicator that if it is broken to the upside Bitcoin could try to reach the top of the channel instead of the bottom.
Bitcoin Market Data
At the time of press 2:51 am UTC on Nov. 7, 2019, Bitcoin is ranked #1 by market cap and the price is up 0.55% over the past 24 hours. Bitcoin has a market capitalization of $170.05 billion with a 24-hour trading volume of $12.03 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 2:51 am UTC on Nov. 7, 2019, the total crypto market is valued at at $263.66 billion with a 24-hour volume of $39.98 billion. Bitcoin dominance is currently at 64.49%. Learn more about the crypto market ›
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