Of course a strong rally could invalidate this. It looks less like bears growing in strength and more like there are less buyers at this range. So for now even though these indicators signal a weakening bull trend, we are still very much in a range. So it’s a question of whether this is a correction or a more significant drop.
Watch the 12h 20EMA and the support at around $47.9 to $48k. Some supportive confluence there. If it breaks, then the 200 DMA is next, and a fairly key level for bulls to defend, around $46.1k. Losing the 200 DMA could be an early signal of rising sentiment or even a dead cat.
Below there is the 20/ 21w mA support band starting at $42.4K that would confirm rising sentiment but still a level bulls could recover from. And if it falls below $41.8k I’d hope for a quick recovery by bulls or the bears may regain control and we would see further downside with a major retest at the bottom of this 10 year channel around $37k.
And if we close below $37k I will call this almost definitely a dead cat and we are likely returned to bear market.
For bulls, they need to keep eyes on the 21w and see if it manages a cross and close over the 20w . That will likely precede more significant upside along with strong sentiment growing.
They critical level to break is at now $50k, since that is the level Bitcoin failed to recover at in May before crashing to the upper $20k range. Above there the next test for bulls will be $53k.
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