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Bitcoin (BTC) bearish weekly close - how low will it go?

Published 02/09/2024, 10:45
Bitcoin (BTC) bearish weekly close - how low will it go?
BTC/USD
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Crypto Daily - Bitcoin (BTC) has just suffered bearish weekly and monthly candle closes that make it hard to be optimistic for the month of September. Will Bitcoin now lead the crypto market down to much lower levels?

Monday manipulation?

With a bank holiday in the U.S., and Bitcoin thinly traded and lacking real volume, Monday could be a day where the $BTC price is manipulated quite heavily. Which direction this could take will be up to those doing the manipulating - if this takes place of course.

$BTC falls out of its channel

Starting on the short time frame, it can be seen that the $BTC price has fallen out of the upward sloping channel, and has confirmed the breakdown before heading lower. A measured move for the breakdown is at $52,800.

Real danger on the weekly time frame

However, it’s on the weekly time frame where one can see the real danger for the $BTC price. An enveloping candle on the weekly is no light matter. This is where a weekly candle body completely envelops the previous one - so looking at the chart above, the last red weekly candle has done exactly that to the previous green candle.

On top of this, one only has to look at how the weekly Stochastic RSI closed. It was looking positive for most of the week, that we would see a cross up in the indicators, leading to some bullish price momentum. However, the Sunday bearish close has led to the opposite happening, with the blue (fast) indicator line crossing below the red (slow) indicator line - signalling bearish price momentum.

Is below $40,000 a possibility?

On the monthly, it can be seen that $BTC has dipped below $59,000, which is an important resistance/support level on this time frame. Could it be that $BTC now heads back towards the bottom of last month’s wick down? With the previous two month candles both being bought up heavily, leading to those two long wicks, it would seem quite a job for the bears to force the price down without it being bought back up yet again.

When one goes into the very high macro time frames, the fibonacci levels are just as important. If one looks at the fibonacci levels for the entire history of Bitcoin, it can be seen that they are incredibly accurate for predicting price levels.

Bitcoin has already tagged the 0.382 fibonacci, and it could come down there once again. Also, it can be seen that the most important fibonacci at 0.618 has quite a lot of concordance with support and resistance. Could it come back to this level? Of course, the possibility is always there. Is it likely to do so? Good horizontal support can be seen at $42,000, so a wick down below this to $38,000 could happen, leading to a 49% correction from the top.

Sell at your peril

However, this is a bull market, the S&P 500 has just made its highest monthly close in history, and global liquidity is ticking up, with the spigots really set to open wide going into the end of this year, and through most of the next. This is the sort of environment where Bitcoin would likely be at its best. Sell at your peril.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

This content was originally published on Crypto Daily

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