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Bitcoin price dumps in correction

After more than a week of bullish sentiment and positive price action, bitcoin has dropped noticeably in price. Let’s check out where we are on the charts!

1-Week chart

Image Courtesy: TradingView.com

Bitcoin, on the weekly chart, showed strength early in the week. The asset, however, did not quite reach the red zone of potential resistance lying above. Price spent considerable time in that area previously, making the range a possible formidable opponent in the days ahead. This market valuation also did not quite reach the 50-week moving average (MA).

BTC has not yet backtested the previous red zone of resistance, roughly between $4,061 and $4,400. Price could possibly head down to that level and test it as support.

Crypto’s largest asset did breach the 50-week smoothed moving average (SMMA) during the past two weekly candles, but has been unable to capture a candle close above it.

After a stark drop in price, bitcoin found 20-week SMMA. The coming days will show whether or not the indicator holds as support.

1-Day chart

Image Courtesy: TradingView.com

Regarding daily candle data, the 300-day SMMA stood as resistance, blocking bitcoin’s advances. The asset tapped the level multiple times and even wicked through it before descending boldly back downward.

The 200-day MA has not yet seen a backtest as support, as of press time. Furthermore, the 50-day Moving Average still looks toward a possible golden cross with the 200-day MA in the coming days as well. This kind of golden cross is known as a historically bullish event.

4-Hour chart

Image Courtesy: TradingView.com

Price on the 4-hour chart appeared to show slight divergence with the Relative Strength Indicator (RSI), possibly pointing to decreased momentum. A fall in market valuation followed the divergence.

This phenomenon also seemingly appeared after bitcoin’s first strong push upward, as noted on the left side of the chart.

The asset broke down through the McGinley Dynamic, as well as the middle and lower Bollinger Bands. During the uptrend, price held the middle band nicely as support. After this recent bearish action, bitcoin could possibly now find the middle band as resistance during some type of downward trend, if any such movement were to occur.

Image Courtesy: TradingView.com

BTC also posted a significant fakeout past the top of an ascending triangle of sorts.

Popular crypto analyst and influencer Tone Vays predicted the possibility of such an occurrence in an April 10 video. The analyst explained the triangle structure did not feel right, and indicators pointed toward decreased momentum. He also went over the results in a video on April 11.

Image Courtesy: YouTube.com (Tone Vays)

 

*This article is based on opinions, speculations and interpretations from the author and others, and is not in any way financial advice. Writing about price levels, charts, etc., is purely speculation, subject to speculatory bias. Nothing written is any kind of advice whatsoever. Proceed only at your own risk.

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Written by

BJ is a full time writer, editor, and trader in the cryptocurrency space. He has written many professional articles for numerous ICOs, news sites, and other interested parties in the crypto space. He is also a trader, staying up to date with the crypto markets constantly, and dabbling in traditional financial market trading occasionally.