Bitcoin is going through a brief correction, and traders are getting fearful after each support level break. We have already started seeing 5000-6000$ correction target after the ongoing correction, which is standing at 13.5% at time of writing.
Fear and Greed index is scored at 41, and It indicates fear sentiment in the market. According to our previous fear and greed index analysis, Index score below 40 could present a nice buying opportunity for buyers.
Now let’s look at technicals to find out how far this correction will go, and will bitcoin go up again?
Bitcoin Technical Analysis -1D Chart
Current Price : 9134$ (Bitstamp)
Key Support Levels: 8500$, 8800$ and 9100$.
Key Resistance Levels: 9500$, 9800$ and 10100$
CME Gaps: 7750$ and 8550$
Elliot Wave Counts
- BTC had completed the first major wave at 10500$, and now going through the second wave.
- The Second wave can be divided into 3( ABC ) or 5 sub-waves(ABCDE).
- BTC is currently into C wave of a second major corrective wave.
- According to Elliot wave structure – BTC should bounce from 9200$ support and retest 9700$.
- If BTC manages to break above 9800$ area then the correction will be over and bitcoin should continue the rally to 12000$ and higher.
- But If BiTC finds rejection during 9800$ retest, then we might see an extended correction down to 8500-8800$ area before a significant bounce.
Market Structure
Bitcoin is currently trading in a falling channel inside a major uptrend channel. The Falling channel support is at 9100-9200$, and resistance is at 9700-9800$. Major uptrend channel support is at 8500$.
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If BTC fails to bounce from 9100-9200$ support than we could possibly see much strong bounce if price visits 8500-8800$ area. This area should also act as a strong area of interest for buyers.
Market structure should remain bullish on higher time frames, as long bitcoin stays above 8500$.
Moving Average
Bitcoin started dropping after a golden cross formation happened between 50 and 200MA on daily chart. Bitcoin is currently trading below 21MA, and holding support above 100MA. Bitcoin needs to reclaim 21MA as support for bullish continuation on higher time frame.
Conclusion
Bitcoin will go up as long price stays above 8500$.
We are expecting a bounce to 9800$ area soon, than it depends on how price will react at that level. If Bitcoin clears 9800$, than we might not see 8500-8800$ level, But in case of rejection bitcoin can drop to 8500$.
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