Bitcoin Price Analysis: Bitcoin Faces Pivotal Support as Bulls Exhaust Buying Pressure
After seeing a rally to the $11,000s, bitcoin trading account has managed to pull back to the $9,000 range and has left many bullish investors confused. The initial bullish rally seemed promising as it broke the macro, descending channel that governed much of the market over the last two months:
Figure 1: BTC-USD, 6-Hour Candles, Descending Channel
The breakout of the descending channel (red dotted channel) gave hope to many bullish investors as it seemingly signaled the end of the downtrend and perhaps the beginning of a sustained bullish reversal. The volume was increasing and the price was pushing full steam ahead. However, after a few days of strong bullish movement, the price took a sharp turn downward and broke the governing channel that outlined the bullish rally from the $6,000s:
Figure 2: BTC-USD, 30-Min. Candles, Bullish Channel
As noted in the previous BTC-USD market analysis, there was a possible distribution trading range (TR) under way, and I mentioned that a breakout above the TR was likely. However, if the market managed to break out and return back inside the TR, that would possibly mark the beginning of a sustained move downward:
Figure 3: BTC-USD, 30-Min Candles, Distribution TR
Yesterday, the market saw a strong push below the TR, where it managed to find a bottom around the $9,600 range. After finding a local bottom, the market returned to the TR from the bottom side and was ultimately rejected from the TR, marking a possible last point of supply (LPSY) for the TR. Currently, the market is hovering just below the TR and is on the tipping point of breaking strong support. If we manage to break the strong support around the 38% retracement values (shown in Figure 3), I expect to see widespread capitulation that will lead to a return to the bearish channel shown in Figure 1. It is entirely possible that we could see a return to the TR once more, so I’m not ruling out the possibility of a short-term bullish rally. However, I have very little hope at the moment for a resumption of the macro uptrend.
If we manage to push new lows, I expect to find support in the low $9,000s as this marked the breakout of the current, failed rally. From there we will have to reassess the market conditions, but for now, I have very little confidence in a bullish continuation.
- After a strong uptrend, and after a breakout of the bearish descending channel, the market saw a strong pullback.
- The strong pullback marks a potential distribution trading range on the 30-minute candles.
- New lows may be in store for bitcoin as it decides whether the bulls are too exhausted to keep the buying pressure aloft.
Trading and investing in digital assets like bitcoin and ether is highly speculative and comes with many risks. This analysis is for informational purposes and should not be considered investment advice.
This article originally appeared on Bitcoin Cryptocurrency News.
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