Author – @YarrPiratez

Bitcoin has continued its downfall after getting rejected twice from the $11,698 resistance level and hasn’t been able to find support to recover from.

Last night was a real fight between bulls and bears. At the moment, the price is hovering above the major uptrend line, which has acted as a reversal point in the past and what is important is that it is inside of a strong support zone. The good side is that the support area is holding for now.

First Bitcoin Chart

This is by far the longest uptrend support line in the history of bitcoin and has held even in the worst scenarios. Stoch RSI enters an oversold position and is indicating that sell momentum is coming to its end. When this momentum indicator starts pointing up and volume starts expanding it will confirm a change in momentum from sellers to buyers.

Second Bitcoin Chart

This Second Bitcoin Chart shows a good example of how bitcoin needs to perform before recovering from this dip and moving into bullish territory.

1. 0.786 is acting as a resistance level and the daily candle needs to close above this. Also, breaking above the $7,600 level would signal that it wants to move higher.

2. Breaching through of moving averages is another signal for a price trying to push higher.

3. The biggest confirmation is that, when it manages to break above 0.383 Fibonacci level, the resistance zone and an uptrend line is found close to it.

Third Bitcoin Chart

The third chart shows a double bottom formation. What is a double bottom pattern?

Quoted from Investopedia:

A double bottom is a charting pattern used in technical analysis. It describes the drop of a stock or index, a rebound, another drop to the same or similar level as the original drop, and finally another rebound. The double bottom looks like the letter “W”. The twice-touched low is considered a support level.

If it does not manage to hold strong support levels, then I would look at the next support level of $5,923 for possible reversals. This should form a clear double bottom pattern.

Conclusion

If Bitcoin does not manage to hold key support area which is mainly formed by a lower uptrend line and a support zone, then it’s likely to move further down. The chart is starting to favor more bullish sentiment. Minor pullbacks can be expected before moving upwards.

It’s not looking that terrible anymore and it’s important to wait until further confirmations.

Relax, zoom out and don’t panic! 😉

DISCLAIMER:

Please be aware this is not financial advice. You are responsible for your trading and investing decisions. It is highly recommended that you do your own research before investing in anything.

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Also published on Medium.