Today's Technical Analysis
Following the sudden downtrend that has taken place in recent days, here's how we are currently looking.
As currently illustrated in the above chart, we have two support lines, both highlighted in green (one is currently masked by the price). If this support level between $6,500 - $6,800 USD, we will likely see a drop down to sub $6,000 USD where the next support may be. While this may be unlikely in my opinion, a drop down to these levels is not all that bad as it will be the last significant drop to shake out many weak hands.
Since the highs of December last year, we have seen volumes and interest decrease. As a result, low-volume in this case indicates that traders are not settled on this current price, and a reversal may be in play. It is important that when Bitcoin makes a price move, volume needs to be at a significant range for the price to be sustained.
The arrow indicated on the chart reveals my anticipated position in the next few days. I can see a push towards $7,000 - $7,200 USD levels, however caution is needed as the recovery may only be limited due to such circumstances.
In conclusion, if the price can consolidate within this big pennant triangle (coloured purple) for the next week, we will see pressure tightened, and a breakout will be imminent, whether that be upward or downward. This drop does not by any means put Bitcoin's eventual bull-run at risk, this is merely a small drop in the short-term that will not be affected in the long-term.
Feel free to ask any questions or queries.
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