Bitcoin price has been accelerating massively in recent months, with Bitcoin (BTC) rallying from $10,000 to $41,500. This rally went vertical without any major corrections in between.
However, every upward cycle has its standard 30% corrections, which can even be considered healthy for more upside.
Bitcoin’s price started to fall south in the past days as it dropped 25% to $30,000. This dropdown was also influenced by the U.S. dollar’s sudden surge, which might be bottomed out in the short term.
Bitcoin price flips bearish on lower time frames
A trend reversal starts with lower time frames flipping bearish, and this chart is an example of such a trend reversal. The $38,900 support was lost after multiple tests.
That’s not bad in itself. But when the support level flips bearish into a resistance, that’s likely to trigger continuation downward.
A similar support/resistance flip occurred at the $36,300 area, after which the price accelerated downward to the support areas at $32,500 and $30,000. Traders and investors should remember that downward corrections almost always occur in a fast and painful move.
However, support seems to be found at $30,000, which can induce some range-bound constructions for now. Such a range-bound construction is healthy for the markets, as strength can be built for the next impulse wave. This impulse wave will most likely occur at a later stage in 2021.
Fibonacci confluences with the current support levels
The 3-day chart shows confluences on the levels of interest for Bitcoin investors. In general, the previous all-time high at $20,000 would be a tremendous gift to the entire market. However, above this last all-time high, other levels are found and will likely be formidable support.
These levels are aligned with the Fibonacci indicator. The first significant level of support is found in the region between $29,500 and $30,500. This is the level where…