Consistent with today’s expectation that Bitcoin (BTC) price would make a large movement soon, Bitcoin has made a large movement down out of its ranging consolidation zone. This dump has come after a month of consolidation around $8,000, which itself followed several months of consolidation above $10,000.
On the 4-hour chart, we see that a quick bounce and dump in the past few days was the last straw for Bitcoin, retesting $8,000 just too many times. Yesterday’s rapid reversal obviously caught the bulls off guard, and price has fallen to what is likely strong support from earlier in the year.
The RSI is deeply oversold even on the medium-term 4-hour, and so a bounce soon is likely. The strength of a bounce will be our first new piece of information about the character of the new, forming local structure.
On the daily, we see the origin of the present support zone, carved out during May-June of this year. Even if Bitcoin moves lower, it is likely to linger in this zone for at least a little while because it took so long to blear this level on the way up. And it will probably broadcast some signals that it will move lower.
We see the RSI uptrend breaking here, which will be unfortunate news for Bitcoin bulls if it closes like this. But there is still a good chance of getting bull divergences on higher timeframes versus price in the coming days and weeks.
A more detailed long term analysis will follow tomorrow, with potential support targets.
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