·

Bitcoin dips $400 overnight before retaking $10,500: Is this what a bull market looks like?

Bitcoin dips $400 overnight before retaking $10,500: Is this what a bull market looks like?

Disclaimer: This article contains technical analysis, which is a methodology for forecasting the direction of prices through the study of past market data, primarily price and volume. The content presented in this article is the opinion of the author. None of the information you read on CryptoSlate should be taken as investment advice. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own diligence and consult with a financial advisor before making any investment decisions.

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.

Bitcoin US dollar price chart
BTC/USD by TradingView

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.

Bitcoin US dollar price chart
BTC/USD by TradingView

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.

Bitcoin US dollar price chart
BTC/USD by TradingView

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.

Bitcoin | BTC

Updated: Feb 13 at 3:51 pm UTC
$10,251.82
-0.65%

Bitcoin, currently ranked #1 by market cap, is down 0.65% over the past 24 hours. BTC has a market cap of $186.74B with a 24 hour volume of $49.75B.

Chart by CryptoCompare

Bitcoin is down 0.65% over the past 24 hours.

Posted In: , Price Watch, Technical Analysis
Invest with AMFEIX

Like what you see? Subscribe to CryptoSlate

Get our daily newsletter containing the top blockchain stories and crypto analysis straight to your inbox.

Sign up to stay informed
Ali Martinez
Author

Ali Martinez

Technical Analyst @ CryptoSlate

After Ali began forex trading in 2012 In 2014, he came across Bitcoin’s whitepaper and was so fascinated by the idea of a decentralized, borderless, and censorship-resistant currency that he started buying Bitcoin. By 2015, he started traveling to spread the word about Bitcoin.

View author profile

Commitment to Transparency: The author of this article is invested and/or has an interest in one or more assets discussed in this post. CryptoSlate does not endorse any project or asset that may be mentioned or linked to in this article. Please take that into consideration when evaluating the content within this article.

Disclaimer: Our writers' opinions are solely their own and do not reflect the opinion of CryptoSlate. None of the information you read on CryptoSlate should be taken as investment advice, nor does CryptoSlate endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your own due diligence before taking any action related to content within this article. Finally, CryptoSlate takes no responsibility should you lose money trading cryptocurrencies.