Bitcoin broke down pretty smoothly yesterday. I would not consider this a fake breakout, since it had everything it needed, a volume, vigour and close of 4h candle. Following that we have seen a candle that was not so strong. It all happened right at the time when S&P 500 started to dump, which probably also helped Bitcoin to push the price more downwards, to about 12 % drop. I honestly believe that this would not have happened if S&P 500 did not fall down.
Looking at the daily chart, I still have a clear goal and that is the rise of Bitcoin. This dump is pretty strong and does not seem to be slowing down, but I would not be entering short positions. Alts look really weak as well. This however seems to be the edge, when the reaction from Bitcoin has to come. For the past few weeks, Bitcoin has not done anything significant during the weekends and there has not been almost any volatility. It looks as if Bitcoin was only waiting and watching S&P 500. For the daily chart, however, I will be looking at these two possible price movements.
What to expect in coming hours?
In the coming few hours we should be closely watching the levels of 36 639 – 38 108 USD. This is a support level where the dump has to be always reversed up and the buyers need to step in. I believe that during the weekend Bitcoin will slowly reach this price levels.
But I am not expecting any serious price movements, definitely not to upside. A lot will also depend on the situation around S&P 500 and its daily and weekly close, since S&P 500 is also at a support level. I mostly believe that the weekend will not bring any significant movement and we will only be waiting for Monday.
I do not think that the situation is somehow critical yet. Obviously the 40 000 dollars was a strong support but we have not seen a sharp dump below it, since we are still pretty close to it. Near future movements will depend on todays close of indices, since they can dictate the price movement before the weekend.