After a period of hanging on to the $64,000 support, Bitcoin has not only dropped through this, but is currently below the $63,000 support. Will the 0.618 fibonacci level come to the rescue, or is there a further drop to come?
A big swing towards Fear
Source: https://alternative.me/crypto/fear-and-greed-index/
If there wasn’t a lot of fear in the market over the previous week, the Fear and Greed Index is certainly swinging in that direction now. After a long period where the Fear and Greed Index was in the mid 70s of extreme greed, this indicator is now showing a neutral score of 51, which is a 20 point swing from last week.
Serious concerns for price
With all the miners selling, the long term holders taking profits, and the hedge funds employing their “carry trade” to good effect over the last few weeks, the $BTC price has struggled to make any upside movements.
If the price were to get below $60,000 and hold below for any length of time, this would be of very serious concern. The price could even go down to around $48,000 and still stay in the bull market, but this would likely have a lengthening effect on the overall bull market, and may also stunt the eventual market top.
$BTC bullish wedge pattern
Source: TradingView
Nevertheless, now is certainly not the time to panic. On the short term time frame of the 4-hourly, the $BTC price is in a downward sloping wedge. This is a bullish pattern, and it would be more likely for the price to break out of this pattern to the upside. That said, if it broke downward this would be very bearish.
0.618 fibonacci is strong support
Source: TradingView
In the more macro time frame of the weekly, it can be seen that the $BTC price has settled nicely above the 0.618 fibonacci. Given that the stochastic RSI is now at the bottom on this time frame, it might be expected that a bounce occurs. If the price falls through to the 0.786 fibonacci the bounce becomes even more likely as this also lines up with previous strong support.
If in doubt, remind yourself that this is Bitcoin
If in doubt, it is always good to remind oneself that this is Bitcoin. It is in the midst of its bull market, and who wouldn’t want to buy this asset given the massive degree of uncertainty in fiat currencies? The likelihood is that the price will begin to go up from these levels, but perhaps expect plenty of choppiness over the summer until eventually revisiting all-time highs.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
