Bitcoin drops to 420, a significant milestone, for a number of reasons. The bears are strong, but likewise there are strong lines of support which may put some temporary pauses on this southern momentum.
Let’s take a closer look at the BTC/USD chart on the Daily timeframe (click to expand):
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First thing to make note of is the red horizontal support line. As I type this analysis, price is located here, and it’s already been tested and rejected on two previous occasions; once on the 18th of December last year, and once on the 25th of February, circled in blue.
I’ve performed the Fibonacci study on this chart to seek extensions. In this case, from the low of January 2014 to the highest point since then. This gives us another vital piece of information, as, coinciding with the red horizontal support line, we now have the 261.8% Fibonacci retracement level.
This confluence of key lines provides us with a firm support base, which could hold for some hours. Other potential retrace factors to consider include – the Stochastics, as they are extremely oversold, and the Accelerator Oscillator has turned green.
I expect there to be some ranging here for the next few hours when visualising from the intra day timeframes such as the thirty minute and hourly charts.