Bitcoin price correction started yesterday after we spotted a “Bearish engulfing” candlestick pattern on the 4 hour (BTC/USD) charts throughout yesterday’s analysis. Price correction pulled the price all the way down to $390, but thereafter we started spotting signs that signaled cessation of the downside price correction attempt.
Price Correction Slowing Down on 4 Hour Charts:
By analyzing the 4 hour (BTC/USD) charts from Bitstamp; executing Bollinger Bands and keeping the 38.2%, 50% and 61.8% Fibonacci retracement levels we plotted during our analysis on the 2nd of November, we can conclude the following:
- Bitcoin price started dropping yesterday after it overshot above the 61.8% Fib retracement level ($478.64). The downside price correction wave started after a “bearish engulfing” candlestick pattern was evident on the charts (the grey ellipse on the lower chart).
- Bitcoin price continued to drop until it dipped down below the 50% Fib retracement level at $416. Below $416, the trading pattern started forming candlesticks with long downswards shadows which reflect the strong support the price is getting below $416 at this point. A “doji” was formed before the arrangement of bearish candlesticks was halted by a greenish bullish candlestick.
- Due to the strong support below $416, the price is expected