BTC finally broke out of its upward channel today (purple dotted lines forming a bear flag) and hit some expected support at 54K. I think the question of how bad things can get for BTC will depend on the next few days.
BTC currently has a bit of support in the remaining upward green channel (around 53K), but this too can be seen as a bear flag, and if it were to break, 50-51K is easily possible. If that support breaks around 50K, the most important support for bitcoin will be 43K, since a break there can easily be seen as a double-top situation with a fairly longer recovery afterward.
On the daily side of things, the trend I am especially watching is the wedge forming on RSI. It has been forming for quite some time now, but I have not been paying too much attention to it as prices rising in the short term can easily overpower it (particularly if prices were to bubble). The current price action has caused it to trend downward, so there is still some room to head downward (until the red line on RSI), but seeing as the current price actions has not been too violent, I am interested to see what today's close will be before paying too much attention to it. Additionally, there is bearish divergence forming on daily RSI (the upper white line), but I think we will have to wait and see how large an effect this has as we approach the edges of this wedge.
For the large part, I am watching the daily close today, as well as what potentials there are for either a slight upward retracement in the next 48 hours, potentially leading to a reversal back up. For the most part, a little retrace on the daily chart is fairly health, and the weekly chart is looking rather healthy for BTC, but there is still quite a bit of potential for some negative scenarios in the longer term if BTC doesn't recover soon, particularly for ALTs.
BTC currently has a bit of support in the remaining upward green channel (around 53K), but this too can be seen as a bear flag, and if it were to break, 50-51K is easily possible. If that support breaks around 50K, the most important support for bitcoin will be 43K, since a break there can easily be seen as a double-top situation with a fairly longer recovery afterward.
On the daily side of things, the trend I am especially watching is the wedge forming on RSI. It has been forming for quite some time now, but I have not been paying too much attention to it as prices rising in the short term can easily overpower it (particularly if prices were to bubble). The current price action has caused it to trend downward, so there is still some room to head downward (until the red line on RSI), but seeing as the current price actions has not been too violent, I am interested to see what today's close will be before paying too much attention to it. Additionally, there is bearish divergence forming on daily RSI (the upper white line), but I think we will have to wait and see how large an effect this has as we approach the edges of this wedge.
For the large part, I am watching the daily close today, as well as what potentials there are for either a slight upward retracement in the next 48 hours, potentially leading to a reversal back up. For the most part, a little retrace on the daily chart is fairly health, and the weekly chart is looking rather healthy for BTC, but there is still quite a bit of potential for some negative scenarios in the longer term if BTC doesn't recover soon, particularly for ALTs.