Bitcoin price started to drop after securing the high at $10461.00 on 26th October. The bearish rally in the BTC/USD came to a halt after it formed a bullish morning star pattern at $6642.4 (low of 24th November).
From that level, the BTC/USD bulls tried to regain control of the market but the rally was capped by resistance at $7886.3. Currently, Bitcoin price trading is just above the 38.2% retracement level at $7408.5 ( drawn from the low October 26 to the high of November 24). Therefore, any bullish price action confirmation signal near the trend line support at $7408.5 might push the Bitcoin index towards the next resistance at $7886.3. A daily closing of the Bitcoin price above that level will confirm the temporary bottom formation at $6642.4.
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On the downside, if the BTC/USD bears manage to break the trend line support at $7408.5, the price might fall to the 61.8% retracement level. Though this level might provide an excellent buying opportunity, breaching the support at $7114.0 might result in a sharp fall. However, the bearish dropped is most likely to be ceased near the support at $6642.4. A daily closing of the Bitcoin price below support at $6642.4 might lead the BTCUSD towards the next support level at $5643.8. In conclusion, executing long in the absence of a definite bullish reversal signal might be an immature act.Download our latest quarterly market outlook for our longer-term trade ideas.
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