Bearish divergence as mentioned in my previous analysis on Bitcoin has successfully played out over the last 24 hours, resulting in price levels plummeting towards $9,000 support.
Bitcoin 30 Minute Chart Analysis
On the 30 Minute chart for XBT/USD, we can see the three higher highs price action has developed over the last week. A clear break-down has taken place within the last few hours to complete the bearish divergence. It’s likely price levels will continue to drop further and test $9,000 support over the coming days. There’s clear rising support around $9,000 visible on higher time-frames, this will be a crucial level that determines whether price levels will drop much further.
Clear selling pressure evident by the red volume spikes within the last few hours, however, volume still remains reasonably low in comparison to volume spikes seen throughout the beginning of July and late June. It would likely take a larger red volume spike like this to cause the rising support around $9,000 to break, as there are a lot of resting orders around this price level. This was also mentioned in a previous analysis.
Bitcoin 4 Hour Chart Analysis
On the 4 hour chart for XBT/USD, we can see the rising support around $9,000 as mentioned above. If Bitcoin price action breaks through this support with a clear influx of selling volume, it’s likely BTC will drop back to POC (Point of Control) at $7,790. The POC essentially acts as a magnet. In order for any uptrend or downtrend to be sustainable, price levels will often ”correct” or ”pull-back” to the POC in order for an exchange of hands amongst traders. In other words, for accumulation to take place and re-fuel the overall trend.
Price action throughout the majority of May, June, and July traded above the 200 EMA, whilst the trend was very clearly bullish. As of recently, Bitcoin price action has dropped below the 200 EMA which is an indication that a large drop may be coming, in order to refuel the current trend as mentioned above. Once the rising support at $9,000 is broken, a move back to POC is the most likely outcome.
Maxx Momentum flashed a small orange dot which is a sell/buy signal within the last few hours. Given the various bearish indications, it’s safe to assume this is a sell signal. Typically, Maxx Momentum will only flash orange ahead of a potential big move which aligns nicely with my thesis above on how BTC will play out over the coming days and weeks.
Do you think BTC will re-test POC (Point of Control) at $7,790 before a continuation of the bullish trend occurs? Please leave your thoughts in the comments below!
Images via Shutterstock, Bitcoin charts by Tradingview
The post Bitcoin Price Analysis: BTC Plummets Towards $9k Support appeared first on Bitcoinist.com.
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