Bitcoin (BTC) opened the day at $7,600 and began a sharp decline to find lows of $6,800 — a loss of just over 10%. Price has since been pushed back across $7,000 with buyers showing interest in prices below the $7K handle.
The loss in Bitcoin valuation has dragged the entire market down with notable loser being Ether (ETH), which has lost support at $150 and printed lows of almost -15% at $137.
Bitcoin dominance is up for the week at 69%, meaning that BTC has outperformed the remainder of the cryptocurrency market during the continued decline this week.
Cryptocurrency market daily view. Source: Coin360
BTC USD weekly chart. Source: TradingView
Bitcoin is down around 16% from the weekly open of $8,500. As price fell towards previous support at $7,600 and the 100-week moving average (MA), Bitcoin found no support and sold off beyond the 61.8% retracement and down to the 65% retracement of the 2019 bull run where it has found some intermediate support.
The gap between the Fibonacci retracement level of 61.8% and 65% is sometimes referred to as the “golden pocket” where traders look to profit from shorts or take on long positions. So this may explain some of the reasons why we have found some support here. The 50-week MA is also acting to support the price.
Typically the 50-100 week moving average cross has been indicative of a bull market and this is due to occur in about two weeks. However, when Bitcoin has closed below the 100-week moving average historically, this has been followed by capitulation. The 100-week MA now lies at the previous weekly support at $7,600.
It will, therefore, be key to see if the 100-week moving average and the $7,600 level now turn to resistance, which would be problematic for a bullish scenario.
The bulls, therefore, need to look to close the weekly candle above $7,600 which looks to be a tall order. Key Fibonacci levels and weekly moving average support are now down in the $5K levels and this would typically be the…