Bitcoin Reaches Previously Identified Resistance Area Below $12,000
The $12,000 price was previously mentioned as a significant level and the target of the bull retrace:
Conjunction of Resistance Lines on the Weekly Price Chart
No sooner had this resistance level been reached than a bear move set in. On the weekly chart we observe that the reversal occurred accurately at a conjunction of resistance lines, the horizontal level highlighted here above (just below $12,000) and the falling line, which has capped the price since the onset of the bear trend back in December 2018.
While the weekly trend is now turning neutral there is still vast space for the price to move lower and as long as the $12,000 price level holds odds favor a bear market resume.
Monthly Trend Favors More Downside
On the monthly chart the overbought condition visible on the RSI indicator (framed) is far from being exhausted. In combination with the extreme widening of the volatility envelop more consolidation should be expected in the months to come. Shorter term a retreat in direction of $9,500 (rising 7-period moving average) is expected, where the next short term bounce may happen.
This still aligns with the scenario proposed on 22 Dec 2017:
We expect the Bitcoin price to correct down to $7,000, possibly even lower to $4,000.
- As long as $12,000 contains the price odds are in favor of a bear market resume.
- Shorter term $9,500 is the price target
- Longer term a deeper correction towards the previous low around $6,000 should be expected
- A deeper move in direction of $4,000 can not be excluded at this stage