Just last week, Bitcoin has suffered yet another huge decline, generally attributed to the rejection recent SEC rejection of the Bitcoin ETF proposal by the Winklevoss twins and the pushback of the decision for the VanEck and Solid X ETF. With Bitcoin’s sudden drop, the entire cryptomarket became a bloodbath with almost all of the top 50 altcoins recording double digit percent losses. As of press time, total market capitalization is at $213 billion, Bitcoin dominance is at its year-high 51%, and Bitcoin trades at the $6,300 level.
Looking at the charts, this crypto bloodbath seems to be far from over. Price action was rejected at the 0.618 Fibonacci level acting as resistance and coinciding with the downward trendline resistance and upper Bollinger Band. The price broke below the 0.5 and 0.382 Fibonacci support levels, and broke below the middle Bollinger Band to settle below the 0.236 Fibonacci level now acting as resistance. The triple bottom support is holding strong as price managed to bounce from the $6,000 level, which indicates that the bulls are holding their ground at that level. Current price action also shows that Bitcoin is trading at the bottom Bollinger Band. The MACD indicates that momentum is currently in favor of the sellers. The RSI pulled back from the overbought region and has plummeted to the oversold region making a slight bounce.
The technical analysis does not look good for Bitcoin in the coming days. With the RSI currently low and the MACD in favor of the sellers, Bitcoin may trade sideways in the next few days or even weeks. If Bitcoin manages to record gains in the daily candle in the next two days, we may see a recovery in price action targeting the 0.236 Fibonacci level around the $6750 mark. A successful break above the $6,750 resistance level will support the case for an uptrend recovery for Bitcoin. As of now, technical indicators show that price action has higher probability of trading sideways before making a decisive move upward or downward.
(DISCLAIMER: This is not financial advice. The analysis and recommendations provided here are based on my own research and personal opinion. Trade wisely!)
