The last 36 hours have been a rough period across the board for the cryptocurrency space. While we are still in a bearish rotation, the probabilities are starting to favor a bullish bounce. Bitcoin has held the $7200 level and continues to show that the bearish strength is starting to weaken.
Let’s take a look at the Chart of Bitcoin (BTC) to see what may be in store moving forward.
In the chart above, we can see that Bitcoin (BTC) did fail its second attempt out of an inverted H&S formation and in the process, breached both 8200 as well as the 7800 potential short-term support levels.
In addition, we can also see that BTC now resides beneath all of its important moving averages (20/50/200). Moving forward, I think that both investors/traders may want to pay particular attention to the following levels for further clues/evidence with respect to direction.
While everything looks bearish, i'm looking for BTC to recapture both the 7800 as well as the 8200 levels, which were acting as potential support and will now serve as short-term resistance.
On the low end, 7240 as well as the 6880 levels should offer short-term support. If we see a break through of these levels which is unlikely we could see a test of the February low. That is worst case though and is the most unlikely.
Needless to say, the entire cryptocurrency universe remains under pressure and while we fully suspect that both investors/traders will be treated to some relief in the days ahead, a tremendous amount of technical damage has been levied and will take time in order to repair.
Happy Trading!!
