Bitcoin’s price action has left many wondering whether this is what a bull market looks like as the bulls and bears appear to be at war trying to gain control of the trend.
Bitcoin is going wild
The flagship cryptocurrency is going through a period of high volatility today. In fact, it plunged 4 percent, to then regain the losses it made, and finally plummet 3.50 percent. This significant price action took place within seven hours as it can be seen on BTC’s 5-minute chart.
Technically, little to nothing can be interpreted from such a low time frame at the moment due to the high levels of volatility. However, the higher time frames paint a better picture.
On Bitcoin’s 1-day chart, for instance, a spinning top candlestick pattern appears to be developing. This technical pattern tends to form when there is indecision among market participants about the future direction of an asset. Spinning tops indicate that neither the bulls nor the bears are able to gain control of the price action.
Nonetheless, the current candlestick is also a green nine candle based on the TD sequential indicator. This type of candlestick pattern represents a sell signal, which could be followed by a one to four candlesticks correction or the beginning of a new downward countdown.
When a spinning top candlestick and a green nine candlestick are combined, like in this case, the odds for a retracement increase exponentially.
A spike in the selling pressure behind Bitcoin could push its price down. BTC could then look for support around the 78.6 percent Fibonacci retracement level. Breaking below this barrier could trigger a steeper decline towards the 61.8 and 50 percent Fibonacci retracement level. These areas of support are sitting at $8,900 and $8,500, respectively.
There is hope for a further advance
Despite the bearish outlook, it is worth nothing that the $10,480 resistance level is key to Bitcoin’s trend. As a matter of fact, it could even be the catalyst for the next major upswing.
A bullish impulse that allows BTC to close above this price hurdle would take it to make its first higher high since the peak of June 2019. The upward momentum would likely be supported by an increase in buy orders. Investors could enter a FOMO (fear-of-missing-out) stage due to the significance of this milestone.
On its way up, Bitcoin could face significant resistance around $11,500, $12,100, and $13,000.