For two weeks now, Bitcoin (BTC) has been consolidating above $9,000, forming what looked quite like a bull pennant. But aggressive selling has today taken out this zone, ending the two week period of consolidation above $9k. Time will tell if this selloff will stick, but what is known is that $9,000 is very important — and we’ll go into why.
We can start on the 1-hour chart to get a detailed look. What had been slow uptrending within a rising channel, broke down a few hours ago after being rejected at the 55 EMA. A torrent of selling was temporarily held starting in the blue zone, which marks the same support zone of the two week structure thus far; but this level has now given way.
The RSI is now completely oversold on this timeframe (not pictured), and it is hard to say if these prices will stick. A relief rally is inevitable, and probably soon owing to the extreme oversold conditions on low timeframes. While we don’t know if $9,000 can be regained before these prices get painted onto the charts, we do know that $9k is a very important level to have lost.
This is why: On the daily, we see that the 21 and 55 EMAs are both gathered *almost exactly* at $9,000, and thus with the support zone respected for the last two weeks. This line thus represents a sort of line in the sand for preserving the bullish momentum begun on October 25’s massive surge and reversal.
We should also note that the 200-day SMA, often used to in traditional markets to mark broad uptrends or downtrends, has already been lost. Bitcoin is now in the first support zone below $9k, already dipping to $8,700 and well into the full retracement chart from recent price action. We can expect major support to come in at about $8,500, if it comes to that, within the “golden pocket.”
On to the weekly chart, we see another, perhaps more important confluence between price and indicators. Here, the very important 21 EMA (and also the 8) is trending *exactly* at $9,000. The 21 is historically important for Bitcoin, as it was never lost on the weekly chart during the 2016-17 bull market.
This level is now clearly lost, although there is plenty of time to recover it within the week. Obviously it has already been lost in the 2019 market, but was dramatically retaken in late October after the surge from the 55 EMA. We also note the histogram on the weekly, which has started to arch down after today’s price action. Closing with this profile would be very alarming.
In sum, $9,000 was a very important level. If it can be retaken before the week’s end, it may signal confidence that the level is safely defended. The uptrend started on October 25 is still intact, but the margin is shrinking.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
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