After a sharp fall on Dec 4, Bitcoin (BTC) has broken down from its bullish structure. However, it has initiated a short-term rebound.

BTC decreased considerably during the week of Nov 29-Dec 5. It reached a low of $42,000, which was a full 27% below its opening price.

However, it bounced back a bit after and managed to reach a close of $49,396. The bounce created a long lower wick, which is considered a sign of buying pressure. Furthermore, it validated the $44,275 area as support. This is both a horizontal level and the 0.618 Fib retracement support level.

Nevertheless, the previous breakout above the $59,800 area is now considered a deviation (red circle), since the price was not able to stay above the horizontal support/resistance zone.

BTC Chart By TradingView

BTC breaks down from support

When looking at the daily chart, it’s visible that BTC has broken down from an ascending support line on Dec 4. It’s possible that the drop occurred as a result of stop hunting.

The support line had been in place since late July, at the time when the upward movement was just beginning.

Furthermore, technical indicators are bearish.

The MACD, which is created by short and long-term moving averages (MA), is negative and decreasing. This means that the short-term MA is slower than the long-term one. Furthermore, it’s back to creating lower momentum bars, another bearish sign that means the trend is decelerating.

The RSI, which is a momentum indicator, is below 50 and falling. It’s failed to reclaim the 50-line and validated it as resistance. Since the 50-line is often considered a benchmark for a bullish/bearish trend, this is seen as a bearish sign.

Therefore, while a bounce that validates the ascending support line as resistance is possible, the daily chart provides a bearish outlook.

BTC Chart By TradingView

Short-term movement

The six-hour chart shows that BTC could be trading inside a descending parallel channel. BTC moved below the channel on Dec 4 but has since returned back to trading inside of it.

If it manages to continue trading inside the channel, it would be considered a bullish sign. The reason for this is that parallel channels usually contain corrective structures, meaning that a breakout from would still be expected.

However, a breakdown from the support line of the channel would likely lead to lower prices.

BTC Chart By TradingView

The two-hour chart shows that the main support area is found between $45,854 and $46,763. This range is the 0.382-0.5 Fib retracement support level and a horizontal support area.

If BTC were to create a higher low and continue higher, potentially validating the previous ascending support line on the daily chart, this would be the level to create it.

BTC Chart By TradingView

338 Replies to “Bitcoin (BTC) Bounces After Sharp Drop to $42,000”

  1. What’s up to every body, it’s my first pay a quick visit of this weblog; this blog contains amazing and really
    excellent data for visitors.

  2. Hi! I know this is kinda off topic nevertheless I’d figured I’d ask.
    Would you be interested in trading links or maybe guest authoring a blog post or vice-versa?
    My site addresses a lot of the same subjects as yours and I feel we could greatly benefit from
    each other. If you might be interested feel free to send me an e-mail.

    I look forward to hearing from you! Awesome blog by the way!

  3. An interesting discussion is definitely worth comment. I think that you need to publish more on this issue, it might not be
    a taboo subject but typically people do not discuss such issues.
    To the next! All the best!!

  4. I like the valuable info you provide in your
    articles. I will bookmark your weblog and check again here frequently.

    I’m quite sure I’ll learn a lot of new stuff right here!

    Best of luck for the next!

  5. Just wish to say your article is as surprising. The clearness in your submit is simply great and i can assume you’re a professional in this subject.
    Well along with your permission let me to snatch your RSS feed to keep up to date with impending
    post. Thank you one million and please continue the rewarding work.

  6. Heerlijke slag! Ik zou graag in de leer willen terwijl jij je site aanpast, hoe kan ik me abonneren op een blogsite? Het account heeft me geholpen een acceptabele deal te sluiten. Ik was er al een beetje van op de hoogte dat je uitzending een helder en duidelijk concept bood

  7. Leer effectieve geavanceerde SEO-strategieën en -tactieken. Leer hoe u geavanceerde Onpage SEO-analyse implementeert. Leer hoe u geavanceerde interne koppelingen implementeert. Leer geavanceerde technieken voor linkbuilding die de naald in beweging brengen. Leer hoe u uw inhoud kunt optimaliseren voor gesproken zoekopdrachten. Leer hoe u de conversieratio van uw website drastisch kunt verhogen. Leer alles over kunstmatige intelligentie en machine learning van Google. De toekomst van SEO. Gratis download: Geavanceerde SEO-strategieën – Verbeter uw kennis

  8. Aw, this was an incredibly nice post. Spending some time and actual effort to generate a great article… but what can I say… I procrastinate a whole lot and never seem to
    get nearly anything done.

  9. Creëer meer dan 50 soorten sterk converterende Facebook-advertenties en op Facebook gebaseerde verkooptrechters Weet hoe u engagement-advertenties, verkeersadvertenties, messenger-advertenties, lokale bedrijfsadvertenties en nog veel meer maakt Installeer Facebook-pixels en stel aangepaste conversies, aangepaste doelgroepen en vergelijkbare doelgroepen in Bekwaam zijn om uw eigen geavanceerde en effectieve Facebook-marketingstrategieën te ontwikkelen Bepaal uw doelgroep en u kunt deze rechtstreeks targeten via Facebook. Optimaliseer en schaal uw Facebook-advertenties door middel van professionele A/B-splittests en andere analysemethoden Gebruik de Facebook Creative Hub om de bruikbaarheid van uw inhoud Creëer conversie-advertenties met hoge conversie en weet hoe u effectief producten uit uw online winkel kunt verkopen Start en schaal uw eigen SMMA (social media marketingbureau) voor (lokale) bedrijfsadvertenties Gebruik de Facebook Business Manager effectief voor het weergeven van advertenties en het organiseren van Facebook pagina's Gratis downloaden van hierMasterclass cursus YouTube en Facebook-advertenties

  10. Chase Reinier: AI-bots gebruiken voor waanzinnige winsten In deze cursus leert Chase Reiner ons hoe we winst kunnen maken met AI-bots en hoe we onze interactie met onze socialemedia-accounts kunnen automatiseren. AI Bots gebruiken voor waanzinnige winsten Krijg toegang tot marketing-, seo-, sociale media-, handels- en programmeercursussen zonder te betalen. Elke dag uploaden we de meest actuele cursussen. Blijf op de hoogte voor meldingen op ons kanaal. Word hier lid van onze groep Instagram Strategieën Videocursus Torrent

  11. Hi I am so excited I found your web site, I really found
    you by mistake, while I was researching on Digg for something else, Anyways I am here now and would just like to say
    many thanks for a marvelous post and a all round exciting blog (I also love the
    theme/design), I don’t have time to read it all at the
    minute but I have book-marked it and also included your RSS feeds, so when I have time I will be back to read
    more, Please do keep up the awesome jo.

  12. I loved as much as you will receive carried out right here.
    The sketch is tasteful, your authored material stylish.
    nonetheless, you command get got an nervousness
    over that you wish be delivering the following. unwell unquestionably come further formerly again as
    exactly the same nearly very often inside case you shield this

  13. Heya i’m for the first time here. I came across this board and I find It
    truly helpful & it helped me out a lot. I am hoping to present something back
    and aid others such as you aided me.

Leave a Reply

Your email address will not be published.