The long awaited crypto correction appears to have initialized today. After hitting resistance twice and failing to break it, Bitcoin has plunged back below $ 8k now as markets tumble. Analysts have been scanning the charts looking for support zones, and there are quite a few of them.
Bitcoin Slides 4 Percent
BTC has spent the past three days trading sideways at just below $ 8,000. Since its meteoric rally it has hit resistance at $ 8,300 twice and pulled back sharply twice. A weekend dump to $ 7k was quickly recovered but this time the decline looks more ominous.
During the morning’s Asian trading session Bitcoin fell 4 percent to an intraday low of $ 7,620. Unlike the previous minor correction when BTC dropped like a stone, this appears to be a more gradual descent which may continue until it finds support.
Crypto trader ‘The Cryptomist’ has been looking at the charts and has forewarned about this drop;
“Forewarned this drop earlier, and secured most of this month’s profits. I expect us to drop further and test support upon 7.4k region. 1D Rsi still needs to drop. If this support breaks, 6.8k is next regional support,”
Forewarned this drop earlier, and secured most of this months profits.
I expect us to drop further and test support upon 7.4k region
1D Rsi still needs to drop
If this support breaks, 6.8k is next regional support
Trade safe loveys 😊 pic.twitter.com/zek3UQY6mi
— The Cryptomist (@TheCryptomist) May 22, 2019
Bitcoin is still a long way above the 50 day moving average which currently lies just below $ 6,000. However it is the first time in a long while that the 200 day MA has actually turned upwards which is a bullish sign for longer term trends.
If the correction continues many are eyeing the $ 6,400 level as major support and some have predicted a 30% retracement. This was the most traded price in 2018 so a return to it does not seem to be too farfetched. Long term trader ‘CryptoFibonacci’ has zoomed the chart out a little and agrees that this is the region BTC is likely to settle;
“Close below the 10 ema on this chart (different because futures did not open until 2017). The area circled would fill the gap, btw. And, it would tighten up the Bollinger Bands. See what happens over the next few days or next week.”
$ BTC Daily Chart. (non Futures).
Close below the 10 ema on this chart (different because futures did not open until 2017). The area circled would fill the gap, btw. And, it would tighten up the Bollinger Bands. See what happens over the next few days or next week.#BTC pic.twitter.com/Z1x9aV3m5Q
— CryptoFibonacci (@CryptoFib) May 23, 2019
A fall to the $ 6k region will still maintain the uptrend and provide ample opportunity for further accumulation. Bitcoin is currently trading down 6 percent on the week since last Thursday was the day it hit the 2019 high of around $ 8,300 according to Tradingview.
Today’s dip has dropped total market capitalization below $ 240 billion and the altcoins are getting punished as usual. Biggest losses at the time of writing are XRP, Stellar, Cardano, Bitcoin SV and IOTA. They have yet to detach themselves from the moves of Bitcoin as the crypto market cycles rinses and repeats.
Image from Shutterstock