Bitcoin (BTC) $100K Bloodbath: Floor or Freefall? TA Breakdown
Bitcoin’s crazy downward spiral is just not letting up. Just under $99,000 was the price reached on Tuesday, and it may not be over yet. Will Bitcoin continue the plunge into the bear market, or is there still one more throw of the dice for the bulls even now?
Extreme fear pervades the crypto market
Source: Alternative.me
Extreme fear is the overriding sentiment in the crypto market right now and it is no wonder. The $BTC price has lost 21.5% since the all-time high, and this was only one month ago! This equates to a $27,000 loss, and on top of that there may be even more to come.
Can the fightback start here?
Source: TradingView
When looking at the 4-hour chart for $BTC it can be seen that a main component in the current drawdown is actually the downtrend line from the all-time high (faint dotted line). This line has held resistance and support all the way along its length so far. Currently it is holding resistance, and this will have to change, and soon, if the bulls are to start the fight to turn this reversal around. The absolute minimum target for the bulls here is to get back to the $106,500 horizontal resistance level.
$BTC has fallen into very strong support
Source: TradingView
The daily time frame illustrates that things may not be as bad as sentiment suggests. Rejigging the major ascending trendline still gives some room for the $BTC price to fall a bit further. In fact, if one draws Fibonacci levels from the middle retest of this trendline up to the all-time high it can be seen that either the 5.0 Fibonacci level will hold at $100,000, or the price could wick down to the 0.618 Fibonacci at $94,000 and could still return to get back above the trendline by the end of the week.
The Stochastic RSI for the daily shows the indicators bottoming now. This is also the case for the 12-hour and 8-hour indicators, while the 4-hour indicators are on their way back up, as seen in the previous chart.
Current collapse has done nothing to threaten the bull market!
Source: TradingView
Whichever way one views the weekly chart above, it still looks bullish. $27,000 has been wiped off of the price since the last time the 8-year ascending trendline was retested, yet all this has done is bring $BTC back, near to the uptrend line, with the possibility that it just might test the 0.618 Fibonacci at $94,000 in the very worst case scenario.
This high time frame suggests that this reversal is in fact a very healthy one, and has done absolutely nothing to threaten the bull market. A 21% drawdown is perfectly in line with previous ones. Therefore, if the reset has been achieved, this is a great place perhaps to start buying.
One thing that investors and traders might need to get out of their heads is the 4-year cycle for Bitcoin. This was only ever based on two previous data points, so expecting the cycle to have ended just helps to reinforce the thinking that Bitcoin is now heading down into a bear market.
Yes, this thesis could still be right, and we won’t know until Bitcoin falls through the ascending trendline, or makes its way back to a new all-time high, but we will have a very exciting time finding out.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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