Recently, we noted that Bitcion was in danger of breaking below $6000 and this break materialized during the 6/24 session. We had anticipated resistance around $7000, but price didn't even make it back up there before sellers pushed Bitcoin back down.
Bitcoin (BTC/USD) Daily Chart
- The crypto market has been in correction mode throughout 2018 and the new low today is evidence that this mode still grips the market.
- However we see some reasons to anticipate a support in the $5060 - $5600 area. This is a big zone (10% range), and is a key support/resistance pivot area.
- With the RSI in oversold territory, we can anticipate support as price approaches $5500.
- If the bitcoin market continues to capitulate and breaks below the $5000 mark, the next critical level will be the key support/resistance pivot at $3000.
- At this point, we can start to expect resistance first around $6000, and then around $6400.
- A break above $6800 will be needed to revive any bullish outlook even for just the short-term.
Nothing like a 75% drawdown from the top, but I believe this is time traders should have dry powder for this dip. You start hearing about the demise of bitcoin, and if you genuinely believe in bitcoin's value proposition as a store of value and maybe medium of exchange, the contrarian play is appropriate. If you do, you must accept the volatility and be prepared for a long correction market before the next bull run.