Bitcoin Price Analysis: Bitcoin Bulls Find Respite Along Major Support Lines
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Over the last week, bitcoin has seen an aggressive markdown from the $12,000s to the $6,000s — a 50% move in 7 days. Right now, a battle between the bulls and the bears is under way as the market is trying to decide if today’s rally is a temporary bottom or a decisive end to the aggressive bitcoin bear market:
Figure 1: BTC-USD, 1-Day Candles, Macro Trend
To date, the market has broken number lines of support including the daily 200 EMA. The daily 200 EMA has been a strong support for the last few years and has been a pivotal marker when determining the health of the trend. At the time of this article, BTC-USD is testing the macro 61% Fibonacci retracement values shown above. Last night we blew right through that line of support, and today we are attempting to test it from the bottom to see how strong the support has been turned into resistance.
Figure 2: BTC-USD, 4-Hour Candles, Current Trend
The image above shows a massive swell of volume leading into an aggressive fall and a sharp bounce. Whether this bottom is an absolute bottom of the bear trend remains to be seen, but it is unlikely we will be making any new lows anytime soon. We are testing very strong support right now and the effort it would take to break this zone of support is high.
On a much higher time frame, bitcoin has managed to find support:
Figure 3: BTC-USD, Weekly Candles, Macro Support
The weekly 50 EMA has managed to provide very solid support at the moment and is likely to prove difficult to break through in a solid pass. For now, we have strong evidence that a local bottom is in.
- An aggressive drop of 50% in one week leads bitcoin to see a sharp rally from the $6,000s.
- There is strong macro support here and there is a very solid argument that a local bottom has been found.
- Whether this marks the end of the bear market remains to be seen, but for now it seems unlikely that we will see lower lows in the immediate future.
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