Bitcoin is languishing above $60,000 after visiting $58,500 yesterday. With the $BTC chart looking quite bearish now, is the king of the cryptocurrencies about to plummet all the way down to support at $51,000?
Negative sentiment
Negative sentiment is flooding the cryptocurrency market. In the space of just one week the Fear and Greed Index has swung from extreme greed (74) to fear (30). On top of all its other headwinds, the Bitcoin price took a blow to the solar plexus when it was announced that around $9 billion BTC would be distributed to Mt. Gox creditors in July.
This had the effect of jolting the price down as much as 7% on Monday.
The price fell to around $58,500 before recovering later in the day. Tuesday has witnessed a bounce, and the price is currently at $61,300.
A test of new resistance?
Source: TradingView
However, the $BTC price has recently tested what used to be the support at $61,500, and the concern is that the price will now resume the correction. Today’s close will be important to see whether the price has been able to get back above this level. If so, we could perhaps see $BTC head back to the top of the range at $71,300.
M pattern suggests big downward move
Source: TradingView
Failure to get above the $61,500 level would certainly suggest that the M pattern in the above chart could play out. The measured move for this pattern would take the price exactly down to the support at $51,000. It can be imagined that if the price did start to make this drop there would be a lot of selling that could help to bring the price all the way down there.
One particular bullish indicator
With all this mind, there is still one particular bullish indicator that is bound to have some say in the price over the next few weeks and months, and that is the stochastic RSI. It can be seen on the chart above that the initial indicator cross-up has come back down to the bottom again. This means that renewed upward momentum is due to come back in at some point. How long this will take, and whether it might not be until the price has come back to $51,000, is in the lap of the market gods.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
