Bitcoin has been crashing hard, but has reached a critical pivot around the $8000 mark. It recently cracked this support, but rebounded sharply. The question is whether this is just a dead-cat-bounce (DCB) before further correction.
- There was strong volume as bitcoin exchanged hands around the $7500-$8000 price area.
- The weekend action has so far been supportive of bitcoin, but the a-b-c structure of the rally makes price action vulnerable for further correction.
- Furthermore, in the 1H chart, price was unable to push back above the 100-hour simple moving average. I would like to see price above the 200-hour SMA before calling the the correction over, or at least paused.
- Another good sign would be price continuing to bounce off of $8000, in which case we should see if the market is forming some kind of range.
- Eventually a break out of such range would give us further directional clues.
- But if price can's push back above the 200-hour SMA (which is around $10,000 at the moment), and falls below $8000, then, I might anticipate bitcoin tagging the $7,000 mark.