A Technical Look at Bitcoin
A Technical Look at the daily Bitcoin chart shows a break down of the long term support trend line (red dotted line) at around $10,400. Traders should look to see if the price can recover and stay above the $10,400 area. If not, the next short term support area is around $9,500 (white line). This is the most recent low. After that, the next support area is around the $9,000 area. This would be the previous lows and the low for the descending channel. If those areas don’t hold, we can see a drop to $8,800 or lower. The bottom support of the descending channel (red line) is around $8,300.
The good news is there are several support areas where Bitcoin can recover. However, traders should be cautious and understand that price can easily blow through all those support levels since Bitcoin has a history of fast, major moves.
Of greater concern would be if it breaks the descending channel with strength and volume. Right now Bitcoin may be forming a little consolidation area between $11,000 and $9,500, an area it was trading in around mid-July.