It’s been a week of straight daily red candles, as bitcoin plummeted from its $8,500 local high. Was this merely a relief rally and we have yet to bottom out after all? Or was it simply a pullback after enjoying a nearly $3,000 rise from the low of $5,775?

BTC bounced off the 38% fib a couple of times, and it looked like we’d seen the worst of it, but a further fall has taken us back below it, with a low of $7,286. That lines up with the support established last month, just above the 50% fib line. If the current price doesn’t hold, we’re probably looking at the $6,800 zone again.

Currently we’re sat between the 200 and 50 daily MAs, and the trend from that perspective is neutral. Those MAs are narrowing, as they must – they will only diverge once bitcoin trades above the 200 MA or below the 50 again. Ultimately, we’re looking for a Golden Cross, supported by a strong move on volume. But that’s still a ways off yet. It’s a lagging and long-term indicator, but it may not happen until the end of the year now. In the short term, trading above that 38% fib would be positive, establishing a solid price at $7,500 or above.

In terms of further falls, they’re not off the cards. However, we’ve got a long way to go before we reach year lows again. And after such an impressive rally – remember, bitcoin was up almost 50% from its low only 10 days ago – it’s natural it would give up some of those gains.

Still, caution is in the air. A major analysis from Tuur Demeester, the well-known bitcoin investor, suggests we may not see all-time highs again this year.

His article is a good piece with much useful information, and is recommended reading. At this point, an ATH is probably out of reach. However, we will say that

1) That doesn’t rule out significant rises from this point

2) When things turn around, they turn around fast

In other news, most traders know it’s dangerous to play with leverage. Now OKEX has learned the same, after being forced to inject 2,500 BTC to avoid socialising losses stemming from an unusually large position was liquidated. ZeroHedge has a summary of the situation, and suggests that this event may have been driving the sell-off this week.

Lastly, Goldman Sachs have declared that ‘Bitcoin is never coming back’. These words will not age well.

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