Bitcoin price fell 5% today to a new weekly low at $8,660, a point which is also below the 200-day moving average which has been acting as support since reclaiming it in the final week of October.
Bitcoin has been trading hard up against historical weekly support and resistance at $9,550.
If Bitcoin is to maintain a move higher in the near term, we should expect to see BTC attempt to retake the previous support at $9,000.
The bearish case for BitcoinThe bearish case for bitcoin is that this is simply the first leg lower after a failed move higher off the back of a news event.
Failed moves often lead to fast moves and, as we have seen, Bitcoin has fallen out of support.
The measured move target for such a pattern is 100% of the V-shaped "Adam", which would take Bitcoin down to a price in the low $8,000s and back to the point of volume control in recent times.
This pattern would be invalidated if Bitcoin can break and reestablish price action above the previous support level of $9,000.
Bullish CaseThe bullish case for Bitcoin is that a reasonably sharp reaction has been seen by the bulls who have stopped price dead so far following the breakdown.
If the bulls can establish support here, it is possible that the move lower was simply an inevitable stop run that occurred due to leveraged long positions being taken on by overly enthusiastic traders who were in fear of missing out on a higher Bitcoin move.
An early sign if this was simply a stop run and for Bitcoin to attempt a significant move higher will be if the bulls can take advantage of the typically low volume weekend retaking $9,000 as support.
Why Did Bitcoin Price Drop Below $9,000? A Pivotal Weekend Ahead
Published on Nov 8, 2019
by Cointele | Published on Coinage
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