Bitcoin briefly fell under $63,000 early on Tuesday following another corrective leg down that lopped off 8.6% from the price. With the local low at around $60,200, the $BTC price is not far from a cliff edge that leads all the way down to $53,000. Will Bitcoin go over?
$BTC price oversold but still falling
Source: TradingView
For those trying to hold onto their Bitcoin it must feel like the most obvious course of action is to sell. Price action is such that we are coming to the point where only the absolute diehards are still clinging on.
The 4-hour time frame chart reveals that this morning’s low matched up with the 6 February candle body low, so perhaps this signals a local bottom for the time being.
Talking of bottoms, it can be seen that the $BTC price has gone sideways since that almost $60,000 low. Could this be a sign that a bear market bottom is starting to build out? Or is this just a pause in order for the market to absorb the rapid descent down to this level?
At least for the short term, the $BTC price is starting to become oversold. There may well be room for a further price fall, and perhaps this would take $BTC down to a parallel with that $60,000 low? If it does, this would be a double bottom and so would be likely to signal a bounce.
Descending triangle breaks down as expected
Source: TradingView
The daily chart illustrates how a descending triangle broke to the downside as expected. The measured move out of this pattern would take the $BTC price to around $58,000, if the full extent of the move plays out.
It must also be noted that the full measured move out of the bear flag is even further down at $53,000. With the very bearish sentiment that is prevailing, dropping down to this level certainly remains a possibility.
Which support level will mark the bottom?
Source: TradingView
At which of the orange support lines will the bottom be in for Bitcoin? Could it be at $60,000, which would match the last low at the beginning of February, and the first of the bull market highs in 2021?
What about $53,000? This has good support for the 8-month bull flag in 2024. Then there is $40,000, which has also played support and resistance in 2021 and into the end of 2023? Or how about $30,000, unlikely as it might sound, but at least a proper 76% correction that comes in line with previous bear markets?
No one knows how far down this correction will go. However, one thing that is likely is that when the $BTC price turns back up, it will be at a point of absolute capitulation. Are we nearing that now?
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.