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On Monday we saw Bitcoin fall below the support of $10,500 without managing a small retrace first. With momentum still falling, we now look at support levels for $BTC as it approaches our main target area of $8400.
Highlights:
- Support broken
- Momentum still falling on 4hour
- We look at two support levels
- Main target area still near $8400
Starting with an hourly chart, the first thing we need to do is change our support into resistance, since it was broken yesterday. We can see that it has already been retested once, before continuing with the decline.
BTC/USD chart provided by Tradingview
Moving over to the 4 hour chart to look for support levels, we get a better view of the past two months price action. From here we are able to eye out two possible support levels, one of which is our main target for this decline.
The first support level we are able to spot is near the $9000 mark. We can see that back in late May that Bitcoin attempted to breach it, before getting denied back down to below $8000. Then, in the middle of June, Bitcoin managed to break past $9000 and find support above it, before continuing onto $10k and higher.
BTC/USD chart provided by Tradingview
Up next is our main target and support area of $8400. This is a price level at which Bitcoin hovered around for more than a month, struggling to break the resistance. Since the strong resistance was broken, we can now turn it into strong support.
BTC/USD chart provided by Tradingview
Since we know we are able to measure impulse waves with a Fib tool, we will use it to measure the first wave down of this decline. Measuring from the low of $10,300 to the high of $13874, lays out the possible future support levels. From here we can see that both of our support levels are near Fib line, adding confluence in our analysis.
BTC/USD chart provided by Tradingview
Lastly, taking a look at the 4 hour momentum on RSI, we can see that Bitcoin is now back within the downwards trend channel of ours. Currently sitting against resistance at the top downtrend line, could indicate that a decline to the bottom trend line below the 30 RSI is on its way. A dip in RSI would cause a dip in price, which would take Bitcoin down to our first minor support at $9000, and if that is broken it will fall further down to around $8400.
BTC/USD chart provided by Tradingview
Do you think Bitcoin will continue with this decline towards an area of $8400, or will 10k prove as strong resistance and we will see a rise from here onwards? Let us know what you think in the comments below!
Disclaimer: Keep in mind this not investment or trading advice, just the opinion of our analysts. As always, do your own research, make your own decisions.