After the 38.81% drop in bitcoin price in yesterday’s trading, the cryptocurrency recouped some of its losses. It bounced off support at the $4,000.00 handle and is now trading above $5,000.00 at $5,214.76. But where will it go next?
A bullish argument for bitcoin price is that, because it is trading at its lowest level in almost a year, bargain hunters may soon push price higher. If there are enough buyers in the market, we could see BTCUSD soon rally to a confluence of resistance around $6,590.00. This price seems to have the 50% Fib level (when you draw from the high of March 7 to the low of March 13) and the falling trend line (February 18, February 23, and March 7) coincide. This setup is apparent on the daily time frame of BTCUSD.
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Meanwhile, the saying, “The trend is your friend,” suggests that a sharp sell-off on bitcoin price may not yet be over. A closer look at the 1-hour time frame already paints a bearish scenario for the cryptocurrency. By drawing the Fibonacci retracement tool from the high of March 11 to the low of March 13, we can see that BTCUSD has pulled back some of its losses to the 38.2% Fib level. A shooting star candlestick also formed which hint at a potential drop. If sellers jump in on BTCUSD again, we could soon see bitcoin price fall to yesterday’s low at $3,858.00.
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