Bitcoin's moving fast right now, so this is only a short update:
Bitcoin’s brief flirtation above $9,000 came to an abrupt end earlier today and is currently trading around the $8,600 mark; a level that has previously acted as minor resistance but has, on the 4hr chart, become a support line. Resistance lines that flip and become support lines can act as strong support, so there is hope that this support will reverse Bitcoin’s direction. However, as ever, we have to look at all possibilities, and then wait for confirmation to accurately determine the most likely direction.
The Case For The Bulls
Not only is Bitcoin testing the support line. With two strong supports in play, Bitcoin should bounce and head upwards, although the rise may not be long lived. Upper resistance is in place between $9,200 and $9,400 where we would need to further study the candles to identify a break or a bounce.
You’d have to be bold to buy in now, however, with a lot of analysts predicting further drops before any gains are made.
The Possible Bear Outcome
If Bitcoin breaks both support lines, which is a distinct possibility, it looks likely that Bitcoin prices will be heading down to the lower support line that has been in place since July last year. This support hasn’t faced many tests, but it is in place. This would mean that prices would likely slip to around $7,000 before testing support, and before we have to closely monitor prices once again.
I have, for a while, been saying that BTC is heading down to $7,000 and I still believe this is true, but I can see the current support lines holding, at least in the short term, and some volume behind the move may well see BTC prices heading back up to $9,300. In turn, this will mean that there should be fewer red prices on the alt coin market in the meantime.