The Bitcoin price initiated a rapid decrease on November 22. It fell through several support areas without showing any signs of a reversal. It is approaching a very significant support line, which has been in place for roughly eight years.
It is possible that this decrease was caused by the negative news ensuing from China, who has announced more regulations amidst a crypto crackdown. The announcement also reaffirms the stance of the government on promoting blockchain, but not cryptocurrency. More specifically, it reaffirmed the conviction that initial coin offerings are illegal, and tightened regulation on foreign exchanges.
Cryptocurrency trader @CryptoWelson stated that we are entering the $6000 support area which can initiate a reversal.
#Bitcoin looks primed for bottoming out within 2019. After rejecting the resistance I discussed in my earlier calls (above 10k), we’ve seen the markets drop a lot.
We’re now entering the 6K range, which I am confident in the bottom! Make sure to accumulate for the next bull run. pic.twitter.com/Lqtuzw1Uwd
— Welson 📊 (@CryptoWelson) November 22, 2019
Will this area actually reverse the price or will we decrease below? Let’s take a closer look and decide.
Bitcoin Volume Indicator
Looking at the volume profile, we can see that the majority of trading indeed occurred near $6500. This transpired over May-October 2018, before the breakdown which sent the price to $3200.
However, the current weekly candle is bearish engulfing, cutting inside significant support offered by previous wicks. This is a bearish development.
Additionally, we can look at the logarithmic support line and find a similar support level.The support line is drawn beginning in 2011 and the price has reacted to it more than five times.
Currently, it is at $6000. However, since it is ascending, it will move higher as time goes by. Therefore, if the price were to reach it next month, it would likely fall above $6500, the upper limit of the support…