The latest cryptocurrency news let us see how the Bitcoin price shows three technical signs of a severe correction which have been noticed in the past, too. As BTC consolidates in a tight $6,900 to $7,100 range, there are three technical factors which suggest that BTC is vulnerable to a sharp correction.
We can see that the BTC price has been consolidating in this range throughout the past 36 hours, not going back below $6,900 and not going over $7,200. Typically, a large price movement occurs when BTC gets stuck in a tight range for a prolonged period of time.
In the latest Bitcoin news, however, there are three textbook factors which show how Bitcoin is vulnerable to a large move down. These include the deviation from the descending trendline, emergence of a fractal resembling the 2019 top and the increase of Tether (USDT) supply.
Technically, when the Bitcoin price shows 3 textbook signs like these and rejects off a descending trendline, it suggests that a bearish retest of lower support levels is here. Earlier this week, one crypto trader known as Trader XO suggested that in the near term, the BTC price could be following a descending movement and could retest the month’s open.
So it took out high 64s first.
Might push higher for 7k- 7.2k https://t.co/DmLhtNCpgs
— TraderXO (@TraderX0X0) April 16, 2020
Meanwhile, the price of Bitcoin ended up breaking out of the trendline, rising to as high as $7,200 on Coinbase. The price of BTC is now hovering above the line at around $7,107. However, if we see the BTC price rejecting the $7,000 resistance level and breaking back into the previous range, we can see an entire move that would be considered a deviation and one that would signal a severe downtrend.
The $6,950 and $7,050 area has been also an important area of resistance for Bitcoin throughout the past two weeks. It has attempted to break out of it nine times ever since March 20 this year.
As the Bitcoin price shows 3 textbook signs of a correction, we can also see that in February, the dominant coin was showing signs of a local top at $10,500. Then, the price rejected at a key multi-year resistance level and in the days which followed, we could see BTC facing a steep downtrend to $7,700, eventually dropping to a low of $3,650.
According to the analyst @CryptoCapo, the current Bitcoin price trend is only an indicator that there was an entire fractal which sent BTC from $10,500 to the $3,000s.
''Hey but you are comparing 1D vs 1H timeframe''
If structure is the same, result should be the same. You use EMA crosses for direction, I use fractals. pic.twitter.com/EiiIABAp78
— il Capo Of Crypto (@CryptoCapo_) April 16, 2020
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