• BTC
    27365.73 2.15%
    1.08 -0.15%
  • ETH
    1859.58 2.38%
  • SOL
    19.9 2.36%
  • ADA
    0.37 1.09%
  • AVAX
    14.85 1.09%
  • DOT
    5.4 1.77%
  • LTC
    92.43 1.8%
  • BCH
    116.46 1.4%
  • CRO
    0.06 0.65%
    0.88 1.7%
  • LINK
    6.58 0.7%
  • XLM
    0.09 0.58%
  • UNI
    5.14 1.28%
  • SHIB
    0 1.02%

Bitcoin Friday: Technical Analysis of Bitcoin

This week will be the one that will go down in history. We have witnessed one of the biggest plunges in the crypto market. What actually happened and what impact will it have on the whole market? Could this be the beginning of the bear market?

Before we start with an update on the current situation, let’s take a brief look at the history. Bitcoin had been growing at a record pace in recent months resulting in 6 consecutive months of growth candles. To put it in numbers, it was a continuous increase from $ 9,000 to a record $ 65,000, which is also the current ATH. Following such a brutal growth, it was only a matter of time before the correction would take place.

Weekly chart

This week, Bitcoin fell from $ 46,000 to $ 29,000. It has thus fallen to more than a 50% of its ATH. Some altcoins have even dropped by more than 70%. However, this was to be expected after such extreme growths. But what is next?

I would expect the correction to continue on the weekly chart. At this point, I cannot say whether this was absolute bottom or a new one is yet to come. However, I think Bitcoin is bound to create some side structure in the form of triangles or ABC corrections.

technical analysis of Bitcoin on a weekly chart Chart 1: Weekly Bitcoin chart

Daily chart

Looking at the daily chart, we can see that the growth ended with a rising wedge, which is a reversing pattern. From this pattern, we went up to the value of $ 29,000 in the form of an ABC correction. So we tested a strong level and confirmed it as a support. The whole structure would be absolutely fine, if it was not for a massive drop that came within 24 hours and caused a great deal of panic. Have we reached this level in a bit more slowly manner, no one would have batted an eye.

Technical analysis of Bitcoin on daily chart Chart 1: Daily Bitcoin chart

What next?

After such a sharp fall, we have to wait for a reaction. A current weekly candle could tell us a lot. At this point, however, we cannot determine the next development, because we have nothing to build our assumptions on. However, I do not think that the bull market on cryptocurrencies would end for several reasons.

  • Quantitative easing and incentives are still ongoing
  • Stock to flow model remains intact
  • Volumes are still relatively high
  • Media and companies are still way too interested in the cryptocurrency world for this bullrun to be over

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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