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Finally, after a week or so of tight, range-bound market, bitcoin poked right through support. The price is almost 10% in the span of just a few short hours:
Figure 1: BTC-USD, Hourly Candles, 11% Drop
Not only did this move occur on high-volume, it occured on high volume. Bitcoin's market structure. This level of supply and overall Currently, we are sitting right on top of new low:
Figure 2: BTC-USD, Daily Candles, Current Support Level
While the volume and spread were pretty intimidating, it should be noted that the most immediate support level is shown. However, we should fully expect the support levels to go to the low $ 3,000s. Until we see the current support level, the trend model remains somewhat neutral. Although the market is swinging 10% in a day, the overall structure is neither bullish nor bearish.
It should be noted, however, that expansion of volume and price is becoming a sign of market distribution. Impulse is present in the Bollinger Bands (BBands):
Figure 3: BTC-USD, Daily Candles, Bollinger Band Squeeze and Expansion
In the market for the market has not been there yet. Looking at the BBands though, we look at the beginnings of a BBands expansion, pointing the market is done consolidating and is ready for its next major move.
In our case, the BBands are hinting toward a downward continuation. If we manage the blue downtrend.
I go to the first support level before I go full-blown bear. Although the current market structure is neutral, it is starting to show the early signs of a strong bearish continuation. It's also important to note that we are still in a bear market. Just because bitcoin is a couple of weeks of strong demand, that does not deny the months and months of downward pressure.
Summary:
- Bitcoin dropped 11% in one day as it finds itself testing its macro support level.
- We are still close to new but the BBands are showing the market is coiled and ready for its next major move.
- Support level in the low $ 3,000s.
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