Bitcoin is in the midst of another crash that has almost taken the $BTC price down to the bottom of last Friday’s mega dump. Is this the beginning of the end of the bull market, or could there be one last chance of a recovery?
Bitcoin tanks again
Source: TradingView
As can be seen in the above short time frame chart, the $BTC price is tanking once again. This isn’t the crazy wild descent that was seen a week ago when $BTC lost thousands of dollars of value in minutes, but it is an inexorable plunge that is fast filling in the huge candle wick left behind by last Friday’s dip. Should the price get down below that point, this would be another lower low. With the U.S. stock market at an arguably very overpriced condition, the writing could be on the wall for Bitcoin.
There is some support at the current price level, while another horizontal support line is down at $106,000. Should these be taken out, the round figure of $100,000 would be the next support, with $98,000 a decent level just below this.
Bitcoin dip reaches mid-channel
Source: TradingView
The daily chart reveals a descending channel with a huge fakeout to the upside that resulted in the new all-time high. From there all the trouble started and it can be seen that the price reentered the channel, faked out once again, and has now been drawn back to the mid-line of the channel. This could act as support, especially as it coincides with quite strong horizontal support at $106,000, to say nothing of a double bottom into the bargain.
The 200-day SMA has been punctured again, but if this dip is arrested by the concurrence of support and chart pattern, it may be that a potential bounce will take the price back above the 200-day SMA. This would be important given that this moving average is considered the bull market support line.
A critical state for the $BTC price
Source: TradingView
The weekly chart for the $BTC price highlights the critical state that the king of the cryptocurrencies is in right now. The ascending trendline has been broken to the downside by quite some distance. Admittedly, the week is not over yet, so there is still a chance that perhaps some news could come out of the US that could save Bitcoin. Failing this, the price looks weak and further downside could take $BTC down to just below $100,000. This would likely concur with the bottom of the channel, so a last ditch bounce might happen from there.
The problem is that even if some kind of a recovery is staged, and the bulls are able to push the price all the way back up again, there is the possibility that the price is rejected from the multi-year ascending trendline once again. Just making a slightly higher high is not going to cut it. The trendline will have to be broken in order to prevent a slow roll over into the bear market.
On a last positive note, the US needs to print an enormous amount of fiat currency in order to be able to roll over its debt. This would likely provide a big impetus to the Bitcoin price. Also, even if we are already in the bear market, $70,000 is a good bet for the bottom, and that’s not too far away.
At the time of going to press, the $BTC price is still falling. Now under $105,000, the bottom of the channel and $100,000 are possibly the next stop.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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