Bitcoin price drops $700 as $10,000 support breaks 🚨 This article is 5 years old...
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Bitcoin price drops $700 as $10,000 support breaks
4 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.
Bitcoin dropped $700 in 30 minutes and hit $9,500 after hovering over $10,000 for more than a week. Despite the bullish sentiment seen across the market as Bakkt’s Bitcoin futures launch approaches BTC could be signaling that a shakeout is underway.
Bitcoin technical analysis
After testing the support given by the 200-twelve-hour moving average 8 different times, Bitcoin finally broke below it. As a result, the pioneer cryptocurrency plunged 6.60 percent within minutes. Although there are almost 3 hours to go before the close of the current candle on the 12-hour chart, it seems like BTC could continue declining.
Based on the 1-day chart, there are three different technical patterns that could be developing: a bull flag, a symmetrical triangle, or a descending triangle.
Bull flag
Bitcoin could be continuing its trajectory within a descending parallel channel, which is part of a major bull flag that has been forming since mid-June. This is considered a continuation pattern that developed after the 84.50 percent upswing BTC experienced from June 10 until June 26, known as the flagpole—which was succeeded by the current consolidation period, known as the pennant.
If this bullish formation is confirmed, it is likely that Bitcoin will end up moving in the same direction of the previous trend—predicting a 45.80 percent surge from the breakout point (determined by measuring the height of the flagpole).
At the moment, this cryptocurrency appears to be testing the support given by the middle line of the descending parallel channel. Falling below this area will likely accelerate the selling pressure behind BTC, taking it to the bottom of the channel. Conversely, if the middle line of the channel is able to hold, Bitcoin could rebound to the top, which could lead to a breakout.
By measuring the Fibonacci retracement indicator from the low of $3,130 on Dec. 15, 2018, to the high of $13,870 on June 26, the different price points that act as support and resistance can be determined as the bull flag continues to develop.
Based on this technical index, a break below the 38.2 percent Fibonacci retracement zone ($9,765) could lead to a drop-down to the 50 percent Fibonacci retracement level ($8,500). However, if the 38.2 percent Fibonacci retracement zone is able to hold, BTC could go up to the 23.6 percent Fibonacci retracement level ($11,300). Breaking above this price point will validated the bull flag, which could end up in an upswing that takes it to $15,600.
Symmetrical triangle
Bitcoin could be breaking down out of a symmetrical triangle that seems to be developing under the same timeframe. This technical formation represents a period of consolidation before the price is forced to breakout in a negative or positive trend. A move below the lower trendline marks the start of a new bearish trend. Meanwhile, a move above the upper trendline indicates the start of a new bullish trend.
By measuring the distance between the initial high and low, the symmetrical triangle predicts a 34.50 percent target in both directions. Thus, the spike in selling seen in recent hours could be indicative of the pattern’s break out direction. Thus, a candlestick close and open below the 38.2 percent Fibonacci retracement zone ($9,765) could lead to a breakdown of the pattern that takes Bitcoin to test the 65 percent Fibonacci retracement level, $6,890. Conversely, a move above the 23.6 percent Fibonacci retracement area could result in a breakout that takes BTC up to $14,650.
Descending triangle
Instead of a bull flag or symmetrical triangle, if a descending triangle is actually forming on the 1-day chart Bitcoin could be about to rebound to the resistance trendline. This is considered a bearish pattern that shows that demand for BTC is weakening. A break below the lower support signals that the downside momentum is likely to continue or become even stronger. By measuring the height from the upper and lower trendline, the symmetrical triangle forecasts a bearish target of 30 percent.
Nonetheless, descending triangles can also form as a continuation pattern to an uptrend. Thus, if Bitcoin breaks to the upside instead, it could try to reach $12,770.
Overall Sentiment
Based on the 1-day chart, three patterns with different outlooks appear to be forming, which could determine where BTC is heading next.
On one side, a bull flag is developing that could lead to a 45.80 percent upswing, if validated. On the other, BTC could breaking down from a symmetrical triangle which predicts a 34.50 drop. And on the last one, the pioneer cryptocurrency could be about to rebound to the resistance trendline to form a new lower high.
Due to the opposing views of the patterns analyzed, it will be wiser to wait for a breakout or breakdown of the 23.6 to 38.2 percent Fibonacci retracement area before entering a trade.
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 down 4.18% over the past 24 hours. Bitcoin has a market capitalization of $174.58 billion with a 24-hour trading volume of $17.48 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 $252.28 billion with a 24-hour volume of $58.14 billion. Bitcoin dominance is currently at 69.21%. Learn more about the crypto market ›
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