Bitcoin (BTC) drops after new record high

3. Dezember 2020 at 10:26 by

Bitcoin is facing resistance at $ 19,400.

Technical indicators have turned bearish.

BTC benefits from supports at $ 16,040, $ 14,850 and $ 13,660.

On December 1, the price of Bitcoin (BTC) reached a new all-time high before falling sharply.

Bitcoin has regained the majority of its losses, but another near-term decline is expected before a potential resumption of its upward movement.

Bitcoin’s parabolic descent and its resistance test

BTC has been following an ascending support line since the start of the upward movement that started on September 4th.

After breaking below this line on November 26, BTC found support near $ 16,050 (fibonacci retracement level 0.382 of the full rise) before starting the current upward movement.

Although BTC hit a new all-time high, this rise only validated this parabolic line as resistance, before suffering a further rejection.

In addition, technical indicators in the daily timescale are bearish. Both the RSI and the MACD have generated bearish divergences and are in decline. The Stochastic Oscillator has also formed a bullish cross.

If the price declines, the closest support areas are at $ 16,040, $ 14,850 and $ 13,660 (fibonacci retracement levels 0.382, 0.5 and 0.618).

BTC’s shorter-term move shows price deviated (red circle below) above resistance at $ 19,400, before falling back below resistance. The price is now looking to move above this resistance again.

Although the short term technical indicators are bullish, there are potential bearish divergences hidden.

If it goes back to the resistance zone, then the reaction of BTC will be crucial in determining the direction of the next move

In the case of a rejection, which seems to be the most plausible scenario, the BTC could decline to Fibonacci retracement levels 0.5 to 0.618, or between $ 17,620 and $ 18,050.

While the long-term tally is not entirely clear, movement over the past two days indicates a corrective structure in ABC (shown in orange below). BTC is reportedly currently in wave B.

Wave B is another ABC sub-wave structure (in black), with BTC being in sub-wave C. Wave C is expected to rise to $ 19,750, this which corresponds to the 0.9 fibonacci retracement level (required for a plateau) and the resistance line of a possible ascending and parallel channel.

Then the BTC is expected to fall again.

Posted in