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Bitcoin daily chart analysis

Another week has passed, another Bitcoin analysis is here, this time focused on the daily chart. We will talk about what is important and what we might expect in the hours and days to come.

Daily chart

The problem with the daily chart is the significant drop. At this point, several things can happen right away. I personally narrowed down all the options to the 3 most likely ones. Let's take a look at each of them.

1. Similarity to COVID market drop

This whole plunge had several similarities to the COVID one. If the same situation from last March were to repeat, it would look something like this. In essence, it would lead to a quick rise of Bitcoin again, followed by consolidation under the current top, and then another jump upwards once again.

Bitcoin daily chart analysis Figure 1: Scenario number 1 - Similarity to COVID market drop

2. Horizontal price movement

The second option that is almost always valid is the horizontal price movement. After a big slump, there will be a longer consolidation and a mundane move to the side. This horizontal movement can be in the form of a triangle or in the form of a range. In essence, the price would go sideways for a while, and only then would the chart decide what to do next.

Bitcoin horizontal price movement Figure 2: Scenario number 2 - Horizontal price movement

3. ABC upward correction

As a third and last option, I see the ABC correction, which would go to the resistance of $ 46,549 - 49,251 . However, the price would reach this price level also in the first scenario I have mentioned here. The only difference here is that in the first scenario we would stay at this level yet in this one, the price would bounce downwards, turning this price level into a resistance.

ABC horizontal upward correction Figure 2: Scenario number 3 - ABC upward correction

Conclusion

These are the three basic scenarios that we should be working with in the medium term. It is highly probable that one of these scenarios will be correct. But what would I recommend? Currently, it is best to focus on 4H and 1H charts. It is ideal to watch the nearest movement and make short few-hour trades.

I have presented a few charts and scenarios here. These will probably be valid for a few more weeks to come. However, from the trading point of view, we have to move to 4H charts because, at this point, we are unfortunately unable to read longer-term trades from this drop.

Jakub is a crypto trader and founder of Trader 2.0 project, which helps hundreds of traders from central Europe to understand cryptocurrency trading and its challenges. Jakub not o...

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