A little over a month ago, BTC bounced off of the confluence of the 0.618 Fib level (measured from the Jan 2015 low to the ATH ) and the 200SMA... actually it went through it by quite a bit but the weeklly close was well above so it was not definitively breached. The bounce was decent but has stalled at the 0.382 level of the entire move down from the ATH .
Now it is retesting the confluence of the 200SMA and the down (previously giving resistance, now offering support as it was broken). The importance of how BTC reacts to this level is difficult to overstate.
IF BTC cannot stay above this level, the only thing supporting price will be the .618 Fib level. To be fair, this level is very significant and may very well hold price.
It is important to understand, however, that if this level is breached (close below on a weekly chart), there is nothing stopping BTC from dropping to 4K.
If this happens, the entire crypto market will be affected. If this were to occur, it will take over a year for the market to recover psychologically and we could easily see the market trading in a 3-6K range for a year or more.
If I were offering trading recommendations (which I am not... I would NEVER do that), I would say to liquidate all or some of your BTC position as you will likely be able to pick up twice as many for half the price in the next few months.
REMEMBER... this analysis is 100% contingent on seeing a weekly close below the 0.618 Fib measured from the Jan 2015 low to the ATH .
The next support is at the .618 fib level at 7800. WATCH THIS LEVEL CLOSELY... if we get a weekly close below 7800, BTC will likely go to 4.5K.
So it appears that disaster is averted... for now. The key will be to see how strong this move is. How it responds to the resistance fib levels on the most recent down move will say a lot.
Keep an eye out for the 8800 level... if it blows through that level, it could result in a very large bear market rally.