Buyers have started to produce a few signs that could suggest that in the short-term selling could be becoming exhausted.
The bad news for BTC came last week when Elon Musk announced Tesla stops accepting cryptocurrency payments. This week has seen one hell of a sell-off which peaked yesterday morning as the price crashed back to 29,567. At one stage sellers took a massive 33.14% off Bitcoin’s price at this week's low.
Buyers returned late in yesterday’s session pulling back 23.01%. Today sellers made a new attempt at taking price lower but once again it was rejected by buyers. From that point, buyers have continued to hold momentum adding 5.45%. There are a few technical points I would like to raise that could support a counter-rally.
What Does the Chart Say?
Firstly, looking at the orange box we can see clear buyer rejection on two candles. Yesterday’s low lines up with key support and for now we’re seeing the 2nd level of support. Lastly, the 2nd level of support lines up around the 50% Fibonacci retracement point. The 50% point is seen as a strong retracement point in a trend.
Obviously, we want to see today’s bar close higher and hold above the 2nd support maintaining the 50% point. A close below would be a concern and we would need to see more evidence from buyers before we go back on the counter-rally idea. Above we see points of potential resistance awaiting. If Bitcoin’s price continues to rally and we do see a reaction it’s not a big deal if a new higher low is formed. A new lower low and break back to support or below would be a worry for buyers and could suggest seller numbers are en masse.
This information has been prepared for information only and does not constitute an offer or commitment. This information does not constitute investment advice as defined by the rules of the FCA.
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