Bitcoin Correction

It seems we're in for another Bitcoin correction! Prices spiked over the $11,000 USD mark today on some exchanges (Another new all time high). We then saw a big drop in price! The lowest I remember seeing being around the $9500 mark.

I'm not sure we're out of the woods just yet either...

Short Term

Here we can see from the MACD where the selling started:

Marked "Bearish"

That's where the price began to fall.

It fell so fast, that the RSI went from being overbought (Above the dotted line), to being almost oversold (the bottom line). This gave us a temporary bounce, but things are starting to turn lower again at the time I'm writing this.

Key Levels

I'm still new to TA, and one of the new tools I've just been reading about is the "trend channel".

The thick red line diagonal at the bottom is a long term uptrend line, which also serves as a key support level.

The top red diagonal line is where the upper boundary (or resistance) has been since the start of the year.

As you can see, we recently broke above that very line.

What Does That Mean?

In short, the top red diagonal line has become the first key support level.

If that line is to be broken, it means we're entering back into the long-term trend channel.

That could also mean that if it does fail, the next support level isn't until around $8000 USD (the horizontal line with "support level" written underneath it.

Longer Term

On a longer term time frame, the RSI and MACD are still showing signs that further correction is required:

The MACD has not yet crossed bullish as it has on the 1h chart above, but the RSI is still showing an overbought reading.

I believe the price will fall further, and I'll be keeping a very close eye on that trend line and the key support level at $8000.

Could It Go Up?

Of course it can! Bitcoin has been defying technical analysis a hell of a lot this year. A great piece of news (like China lifting their ban perhaps) could just as easily see things go the other way.

Always remember: I probably don't know what I'm doing. :-)

Thanks For Viewing!

Not investment or financial advice, only for fun.