Image Source: StockSnap / Tim Mossholder
Crypto traders are keeping a close eye on $30k-$27k levels on Bitcoin. The decentralized digital currency lost ground in mid-April and raise the magnitude of the fall since mid-May. Hence it fell 54% from its peak, lost 36% in May alone. Recent fall is the fourth most significant monthly fall in its history. Here is the monthly downfall for Bitcoin.
As shown on the above chart, thrice prices fell between 37-38% and thrice between 35-36%. For your reference, we have divided the data sets into five; please see the table below.
Shifting the eyeballs to the technical chart, the price finally found ground between $30k, 161.8fe, and parallel support at $28k. The Weekly 50MA is located at $29k. Overall a thick layer available between $30-28k.
What if Bitcoin lost its support?
Trend lovers use Moving averages to set up a trade. When an asset price trades above its average price, it means traders are willing to buy an asset and vice versa if the price lost the average price. We normally use SMA- Simple moving averages and EMA- Exponential moving averages.
Here we are considering the 50 and 200MA. These two are the most popular moving average at all time frames. Our subject cryptocurrency manages to hold the 200MA on the daily chart and 50MA on the weekly chart. Hence the price takes a break. What if these two supports lost in the coming days?
Well, Bitcoin might fall further towards the following support levels. On the daily chart, the price lost all the moving averages except 200MA. So, we focus on the Weekly and Monthly charts, and we found the 100MA at $19k and $21,500 its 20MA. Interestingly this support zone coincides with the previous high of $19,300.
Resistance:
As said above, the price managed to hold the 200MA on the daily chart. We look at the daily fibs if the price is moving higher.
The daily RSI has been crawling higher underneath the oscillator shifted the pattern to bullish. So a mild recovery could be possible with resistance insight. Even after a fourth biggest monthly fall, the price action holds the Golden crossover signal. A violation in the coming days means back to $19k, $15-13k is 78.6fibs.
Bullish case:
We are talking Bitcoin-anything could happen with a single tweet. If the price holds the $27k support its 61.8 fibs and remains the Golden cross pattern we should approach bullish bias. In this case, $77k and $89k are possible as per the weekly A-B-C pattern.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
What is your Technical View?
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