In this article, we’ll be covering the sudden price throw back to $6.3k.
As you can see in the picture above, we took a very sudden and unexpected (to some) tumble in price all throughout the day yesterday (July 9th).
So, you’re probably wondering — what happened?
Well, on a basic level, we know that the price either had to break the resistance at $6.8k or get thrown back.
In the chart above, that white line represents that resistance point.
As you can see below, we failed to break that mark three consecutive times.
Now, this does not mean that we will never break $6.8k or that it is out of the question.
It certainly is a possibility, but the price action from here is going to determine that.
As I scroll out of this view, here’s what I see:
We’re currently in a trading range between $5.8k-$6.8k.
This investopedia source above gives us a great definition of what it means to trade within a range.
Potential Points of Resistance
Above, you’ll see a picture of Bitcoin as it bumps its head against that downtrend resistance (from May 5th to July 4th).
Thus, this downtrend line could serve as a bounce point if the price continues to decline from where it is now.
As you can see the photo above, Bitcoin price on the daily has fallen below the EMA-12 & 26, which isn’t necessarily good news for the bulls, but not a major killer at this point.
Remember, these are lagging indicators, so the most recent price action is not entirely factored in these lines at this point. But this is somewhat bearish, yes.
RSI started diving on the daily for Bitcoin. Not too far from oversold. Buy signal on the RSI never did get triggered. Price started dipping right before that point.
My volatility indicator is saying the same thing.
Buy pressure beginning to wane as well on the daily too.
All is not doom and gloom though. I do not think that the price acceleration was as steep as individuals may have taken it to be. I think its always important to be cognizant on the fact that we are still in a bear market.
So, when selling happens, the volume is going to increase rapidly and so is the rate of selling. It is still worth remembering that we have not broken out of the diagonal channel predicated by the Fib Gann indicator setting that I’ve applied to previous charts.
Disclaimer: Author does not have any money in Bitcoin and is not a financial adviser. Please take responsibility for all of your actions.