BTC Bleeding - When Bottom?Bitcoin is in a corrective phase following a sharp rally, with the $92,000 50-day SMA acting as the first critical support zone. A break below this could lead to further downside toward $89,000 or $73,835. To regain bullish momentum, Bitcoin needs to reclaim $99,860, targeting $108,300 and higher. Keep an eye on the RSI and volume for confirmation of the next move.
Key Observations:
Recent Price Action:
Bitcoin recently reached a high of approximately $108,300, marking the peak of the current rally.
Following the high, BTC has experienced a sharp pullback, breaking below the $99,860 support level and currently trading near $93,569.
The pullback reflects a correction of approximately 14% from the peak.
Bearish Divergence on RSI:
RSI Divergence: While price made a higher high at $108,300, RSI formed a lower high, signaling a loss of bullish momentum.
RSI is now trending below 50, confirming bearish short-term momentum.
RSI will eventually make it to oversold, but that could be far down the road. Still worth noting that it is only at 40, so there could be a long way to go if the correction continues.
Key Support Levels:
$92,000: Immediate support around the 50-day SMA, which aligns with a consolidation zone during the earlier stages of the rally.
$89,000: A secondary potential support just below the 50-day SMA.
$73,835: Major breakout level from the prior range and a strong support zone if the correction deepens.
Key Resistance Levels:
$99,860: This level, previously a support, has flipped to resistance following the breakdown.
$108,300: Recent high and critical resistance, acting as the upper boundary for potential continuation.
Volume:
The recent sell-off has occurred on elevated volume, confirming active selling and validating the correction.
Moving Averages:
The 50-day SMA (blue line) is currently around $92,000, providing immediate dynamic support.
The 200-day SMA (red line) sits significantly lower, near $72,000, reinforcing long-term bullish structure.
Interpretation:
Bearish Signals:
The bearish divergence on RSI has played out, leading to the breakdown below $99,860.
Price is testing the 50-day SMA at $92,000, a key short-term support zone.
Support Zones to Watch:
$92,000 (50-day SMA): Critical for maintaining the short-term bullish trend. A strong bounce here would be encouraging.
$73,835: Long-term support level, aligning with the breakout zone from earlier in 2024. A breakdown to this level would still preserve the macro bullish structure.
Potential for Reversal:
To resume its uptrend, Bitcoin must reclaim $99,860 and hold above it. A strong bounce from the 50-day SMA would reinforce bullish sentiment.
Scenarios:
Bullish Case:
Bitcoin holds the 50-day SMA at $92,000, forms a higher low, and begins to climb back toward $99,860.
A reclaim of $99,860 with increasing volume would target a retest of the $108,300 high and potential continuation.
Bearish Case:
If Bitcoin fails to hold $92,000, the next logical support is around $89,000, followed by a deeper correction to $73,835, which would still align with the broader macro bullish structure.
