Bitcoin price has fallen by 5% to a new weekly low at $8,600, a point which is below the 200-day moving average, which has been acting as support since reclaiming it in the last week of October. Other crypto-assets have also experienced a valuation loss against the U.S. dollar. However, Ether (ETH) and EOS have shown some resilience and have outperformed Bitcoin over the last week. Bitcoin’s failure has been as a result of the gap between the 100 and 200-DMA, which act as resistance and support respectively. For Bitcoin to make a higher move in the near future, it may regain its previous support at $9,000.
The bearish case for Bitcoin is that it is basically the primary leg lower after an unsuccessful move higher off the back of a news event. Mostly, futile steps result in swift strikes, and, as we have seen, Bitcoin has fallen out of help. Bitcoin has a distinct pattern known as “Adam” and “Eve” that has obviously broken down. The calculated move target for such a pattern is 100% of the V-shaped “Adam,” which might take Bitcoin right down to a worth within the low $8,000s, and again the purpose of volume control in current times.
The bullish case for Bitcoin is that a rationally sharp reaction has been seen by the bulls who have stopped price dead so far, following the failure. However, if the bulls can establish support here, it is probable that the move lower was merely an unavoidable stop run that ensued due to leveraged long positions being taken on by over-enthusiastic traders who feared missing out on a higher Bitcoin move.
An early indication if this was merely a stop run and for Bitcoin to try a substantial move higher will be if the bulls can take advantage of the usually low volume weekend retaking $9,000 as support. This would give a high chance of a retest of at least weekly resistance at $9,550, if not $10,000. Interestingly, this will be a significant weekend for Bitcoin, which could easily lead to further instability. Reclaiming the $9,000 range is a clear goal for the bulls over the weekend. Otherwise, a more prolonged period consolidating possibly lies ahead of the $8,000s. On November 8th, Bitcoin corrected from $9,200 to $8,650, making the market sentiment to change from greed to panic once again. The correction came as a result of one of the biggest surges in the history of Bitcoin, which makes the sentiment change curious.
As seen in the chart, the price moved towards vital horizontal support and one of the few areas that must hold to sustain a bull market. The price has been decreasing since the top in June, which implies that the price is bearish in the near future. It is essential that of the green zones around $8,600-8,800 acts as support. Although, a shift towards $8,300 can still occur as a backset of the support level. On the other hand, dropping below this mark would cause the price to lose the trend line and likely lead to a new low under $7,300. However, if Bitcoin manages to hold these levels, a support/resistance flip will come into play, and a bullish breakout in December may occur, and the target to aim by then would be $10,800.
Image by Petre Barlea from Pixabay
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