Over the past 36 hours, Bitcoin has been adhering to a bearish trendline, resulting in a drop to a key Fibonacci level. We’ll need to observe two charts to attain a clearer picture of what’s happening right now.
Firstly, let’s take a closer look at the BTC/USD chart on the Daily timeframe below (click to expand):
I’ve performed the Fibonacci study for this chart from the high at 637 until the month’s low at 430.
We can see how price managed to test the 23.6% Fib retracement level, actually exceeding it, but was ultimately rejected as it failed to close above 463.
NEXT BLOCK SOFIA 2.0 + Fabulous Blockchain After-PartyGo to article >>
There’s a strong reason for that, since we have a trendline heading south, as can be seen on the four hour BTC/USD chart below:
For this four chart, I’ve performed the same Fibonacci study as yesterday’s hourly chart, i.e. from the last major swing low, namely the low of April, at 410, to the current swing high at 470.
Now, look how many times in just a space of a few hours price has tested that red trendline. Then we also had the Stochastic Oscillator heading down from an overbought position. This, in addition to the 23.6% Fib on the Daily (on the first chart posted), is providing further resistance, and the fact that the technicals I expanded upon yesterday, has meant price had no option but to head in one direction. As I explained,
“We’re extremely likely to see further tests, and ultimately I expect price to break 23.6%… There are very strong reasons for my anticipation of such a move… Hence, I’m looking for a drop to the 38.2% Fibonacci retracement level later this afternoon.”
Price finally did indeed test 38.2%, however it doesn’t look like this is the end of the retrace, as we’re seeing the bears pushing even further. From this, it’s clear to me that we’re going to see a touching of the 50% level very soon indeed, and following that, we may see price reach the 61.8% Fib at just above 430, possibly by tonight or tomorrow morning, provided we have a candle close below 50%.