Bitcoin’s dropping like a rock this weekend, and despite price now located at a confluence of certain support zones, it may take more than that to stop these bears.
Let’s take a look at the latest BTC/USD chart. We’re zooming out to the Weekly timeframe to get a bird’s eye view regarding important support/resistance areas, specifically Fibonacci (click to expand):
Thus, I’ve performed the Fib study from the last distinct swing low of 2013, until Bitcoin’s all time high of 1090 in November last year.
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We can see how price is right now trading along the 61.8% Fib level at 450. However, this level (61.8%), has been tested twice previously, circled in blue, where there was rejection. So actually, even though price does seem to be falling rapidly, we know that on two of the last three occasions, it failed to close below this level. We also have the Accelerator Oscillator has green, which could hamper further bears. On the one occasion where price did manage to break 61.8%, it fell as far as the next Fib level of 78.6% at 285.
In fact, we can see further support even on the Daily timeframe, see chart below:
For this chart, I’ve performed the Fibonacci study from the swing high at 990, until the low at 300. And immediately we can see how price is at another Fib level, namely the 23.6% level, which has now been converted into a minor support level. In addition, we have price now below the lower Bollinger band, which could offer some temporary reprieve.
However, the bad news for Bitcoin investors is, on both the Weekly and Daily timeframes, we’re seeing the Stochastic Oscillator still heading down, along with the Awesome Oscillator as red, therefore it’s hard to see support holding for much longer.