- Bitcoin finds refuge above $6,500 but downside momentum is not over.
- The descending channel support and resistance suggests declines could cross-over into 2020.
Bitcoin is exploring more of the downside and is vaguely concerned with the upside. The ongoing losses started a week ago when recovery from levels close to $7,100 failed to break the resistance at $7,700. Bitcoin bulls, demoralized, chose to stick to the sidelines, allowing the bears to have a pre-holiday celebration.
The supports at $7,600 and $7,400 initially came out strongly, ensuring sharp declines remained at bay. However, with the increasing selling activities, coupled with little to no action from the bulls, the price dived further and compromised the next hurdle at $7,200. The break under the key support at $7,000 became devastating enough to the extent BTC tested November lows around $6,530.
BTC/USD daily chart
The daily chart clearly shows Bitcoin disintegrating within a falling channel. The channel support and resistance have been tested on several occasions. However, they remain intact suggesting that the downtrend could last longer and even transit into 2020.
At the time of writing, XBT/USD is exchanging hands at $6,685, slightly below a short-term trendline resistance. The 38.2% Fib level taken between the last swing high of $13,897 to a swing low of $3,106 will also limit movement above $7,000. Other key hurdles to keep in mind are $7,200, $8,000 and the 50% Fibo close to $10,000.
The RSI appears to have slowed the downtrend and is seeking refuge at 30. Upward correction heading to the average will encourage the bulls to add more buying entries. However, for now, investors should get used little or no upward action.
Bitcoin Key Levels
BitMEX Margin Trading: $6,669
24-hour contract volume: $2.4 billion
Open interest: $714 million
Trend: Short term bullish bias
Resistance $6,800, $7,000 and $7,200
Support$ 6,500 and $6,400