The violent correction that created a full-on panic in the cryptocurrency segment continues to unfold in a rather orderly way from a technical standpoint, reflecting the extreme nature of the preceding rally. That said, the percentage losses in some of the coins are huge, and the collapse of Bitconnect accelerated the process, spreading uncertainty among investors, and sentiment quickly got bleak.
Bitcoin remains in the center of attention, and the most valuable coin finally breached the $10,000 level today, causing another strong wave of liquidation in the majors, that could be the base of a more durable bottom, and a consolidation in the coming days after the crazy last couple of days.
The coin is now oversold from a short-term perspective, and although further losses are likely before the end of the cycle, given the still only neutral long-term momentum readings, a counter-trend move is possible in the coming days. Below, $9000, strong support levels are still found at $8200 and near $7650.
Kommentar
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As Bitcoin plunged below $10,000 yesterday, nearing the crucial $9000 level, all of the majors followed the most valuable coin in the panic sell-off. The trend model turned short-term neutral in most of the cases, while the long-term prospects also improved thanks to the deep and violent correction.
Bitcoin itself already traded at slightly attractive levels, as it breached the first possible target for the correction, but I expect a lengthy bottoming process with a possible dip to the $8200 or $7650 supports.
As for the short-term, the oversold rally initiated from the lower boundary of the declining trend channel, and a choppy, hard-to-trade consolidation period is likely ahead that could last throughout the weekend. Strong overhead resistance is found at $13,000, likely capping the advance for now, while the $11,300 support/resistance level could also be in the focus in the coming sessions.
you still think this even with the huge move upwards, isnt it bouncing?
MuMPiTz
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its currently at 11350$, how far up do you see it at least going before retracing?
sebastian.soik
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@MuMPiTz, @melcom555 There should be a bunch of pending trades btween 11k and 13k so it will probably move sideways in this area during the weekend. But there is still selling preassure to let it dip below $9,000
MuMPiTz
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@Sebastian.soik, alright, thanks! can you update if you see a clear change in its trend? :)