When the decline began in early January, the 20 and 50 simple moving averages were the obvious levels of support. After those levels were broken and price gained momentum to the downside with big bearish candles, the next level of expected support was the 200 simple moving average.
On January 21st, price sliced through the 200 simple moving average with ease and formed a low at $4222, 12% below the recent high from January 4th at $4774.
Price went into a mini consolidation a few days after forming the low, and attempted to break back above the 200 simple moving average on January 26th with a fake breakout.
On Friday, price attempted another breakout above the resistance but fell 3 points short of this level. The day did close with good momentum, as seen from the big bullish candle.
If the momentum continues into this week, we may see price trading above the 200 simple moving average.
The bias is still bullish until we see a pattern of lower lows and lower highs below the 200 simple moving average.
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