First the good news/hopium- we are still in generally territory, with a lot of market fundamentals also looking healthy. We had a string of EXTREMELY price action July to August and we paid for it this week. It left bulls lazy and probably a little too greedy- the drop in price earlier this week wasn’t because a lot of people sold their spot positions to take profit- it was a mass liquidation of overleveraged traders and their long positions.
That being said, the first thing that comes to mind when I see global exchange reserves for Bitcoin aggressively dropping , and see clear signs of OTC buying over the past 60 days- those are signs, not . It means folks are buying the dip(s). Bitcoin reserves are currently at the same levels we saw in April during peak bull mania, before the selloff.
But no matter how you feel – once a chain liquidation is set off, it can be felt in the days and weeks after, it elevates fear, and at a minimum triggers ranging and worst case, is followed by another wave of selling. This gives bears strength and puts our current position in the bull market at risk – that means runs tight stoplosses, trade safely.
☙ Our next has some notable confluence- it is August support between $43.9k and $44.1k (tested twice before), it is also a key fibonacci support (38%) on higher timeframes and overlaps the bottom of the short term descending support line we bounced from yesterday. Very close to there and possibly at play in this range of confluence is the main support for February lows at $43.6k.
☙ Below that support range have another notable support, possibly one of the most important- the 21w and 20w support band between $41.9k and $43k. This is the support band I mentioned in earlier posts as a key indicator of the bull or bear market. You can read more on that here: https://discord.com/channels/39062854436…
☙ If we fall below all of those, I’ll start feeling increasingly , and I think the last support bulls should focus on is the 10 year support channel for the lower range of Bitcoin’s neutral market conditions (as in a range between bull and bear). This is an old support line going back to Bitcoin’s earliest days, and below this line is firmly a bear market range, and above it is the possibility of a bull market. That support is currently sitting between $38k and $38.5k.
For the bulls its simpler- they need to reclaim the 200 DMA around $46k, and from there $48k and beyond
Note that 4 degree downtrend on the support, and a whopping 22 degree downtrend on the resistance (and even stronger if you include 6/7 September) – that tells you that in the near term bears are much stronger, than bulls. The bears are pushing their line down, while bulls are slowly losing ground. However if this continues and forms into the , bulls will have a chance to bounce and rally off support once bears overextend themselves/oversell the market.
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