In today's session Bitcoin suffered a strong collapse burning more than 15% in a few hours, then bounced back on the support level at 8,000 recovering a shy 5%.
What was the reason for this dump? The reason is simple and we had already anticipated it in previous analysis: the quotation had reached an important level of multi-year resistance where there was an inevitable massive liquidation by those who were long from 4,000.
Now that we have unsuccessfully faced the downtrend line of resistance (Line 1 - TF:1W) the confidence of buyers has dropped, and withdrawing from the market will give space to the strength of the bears.
The critical level to keep an eye on now is the 8,000, here we find on TF:1D a trend line that has been supporting since the beginning of the bullish movement started in March, plus the exponential moving averages 50 and 200 in golden cross formation, which could be a bull signal. At the same time, a little lower down on the TF:1W, we find the EMA50 and EMA20 supporting it.
A failure of the latter will confirm the reversal of the mid-term trend, converting it into bear market.
What was the reason for this dump? The reason is simple and we had already anticipated it in previous analysis: the quotation had reached an important level of multi-year resistance where there was an inevitable massive liquidation by those who were long from 4,000.
Now that we have unsuccessfully faced the downtrend line of resistance (Line 1 - TF:1W) the confidence of buyers has dropped, and withdrawing from the market will give space to the strength of the bears.
The critical level to keep an eye on now is the 8,000, here we find on TF:1D a trend line that has been supporting since the beginning of the bullish movement started in March, plus the exponential moving averages 50 and 200 in golden cross formation, which could be a bull signal. At the same time, a little lower down on the TF:1W, we find the EMA50 and EMA20 supporting it.
A failure of the latter will confirm the reversal of the mid-term trend, converting it into bear market.