Bottom line: Bitcoin long term structure continues to remain bullish against 3850 lows print in March 2020. The crypto has remained in control of bears since 12500 mark and might be looking to drop further towards 7200-7500 levels in the next few trading sessions.
Fundamental Outlook:
Bitcoin had pushed higher through 10800 mark yesterday, before facing renewed selling pressure. The crypto had dropped over -1.75%, alongside global indices and risk assets. If risk aversion continues, Bitcoin might remain under pressure as safe haven US Dollar might continue to gain. Ethereum dropped over -3.17% closing around 341 yesterday.
Technical Analysis:
Bitcoin has yet again hit resistance around 10800 mark and reversed. The crypto has carved a series of lower highs and potential resistances at 11200, 10950 and 10800 levels in the past few trading sessions. The triangle consolidation might break on the south side pushing below 9800 mark.
Bitcoin had managed to hit just below 12500 resistance on August 17, 2020 and since then it has remained in control of bears. A break below 9800 might accelerate further towards 9000 and 7200 levels over the next several weeks. Bottom line is that 12500 levels should hold well.
Bitcoin had dropped through 3850 lows in March 2020 before reversing higher. Bulls had remained in control and managed to carve a series of higher highs and higher lows through 12500 mark in August. The entire rally might be an impulse wave, which should be followed by a corrective drop.
Also note that fibonacci 0.618 retracement of the entire rally is seen passing through 7200/500 zone. If the corrective drop manages to reach there, high probability remains for a bullish bounce. Most traders might be inclined to hold short positions initiated earlier with protective stops above 12500 and projected targets towards 7200 support.
Prepared by
Harsh Japee, Technical Analyst.
Bitcoin Chart
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