Oversold BTC May See Short Relief Rally, But Trend Remains DOWN!
Looking here at the daily chart of BTC, you can see that it is currently holding the 50 week moving average (in orange) as support. What I've noticed about BTC's interaction with this moving average, is that (in recent history) BTC usually holds on the first test of this moving average, and then breaks out above or below it on the following test.
Looking from left to right, you can see that BTC fell to the 50 week and held it (green circle) then price fell below it and failed to hold it for support (red circle.) Next, there was a selloff, and BTC later rallied up the the 50 week successfully testing it as resistance (second green circle.) From there, the bear market continued and BTC later failed to hold the 50 week as overhead resistance (second red circle.) Now, BTC has returned to the 50 week and we're currently testing it (yellow circle.)
In addition to the 50 week moving average, BTC also has the bottom of the black downtrend channelish formation that it's holding. So, there is a chance that BTC could catch a relief rally here. However, as I've shown in last night's analysis, I think price will inevitably test the 6000 support/resistance zone in red. That's the biggest area that is technically challenging BTC right now, and it's practically inevitable that BTC will test it.
On the RSI, we can see that BTC is entering oversold territory on the daily chart. However, that doesn't mean that BTC can't become even MORE oversold. Regardless, based on the fact that we are entering oversold territory, and the fact that BTC is at major support, I think there is moderate chance that BTC could see a short relief rally here. That can easily be confirmed by a hold clear hold of this area as support.
With that said, a relief rally even to 9000 would NOT change the fact that BTC is in a bear market downtrend. Remember, THE TREND IS YOUR FRIEND! Right now, the trend is clearly down, as BTC has printed nothing but lower highs and lows since June. The trend is ALWAYS your friend, unless you're trading against it.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Looking from left to right, you can see that BTC fell to the 50 week and held it (green circle) then price fell below it and failed to hold it for support (red circle.) Next, there was a selloff, and BTC later rallied up the the 50 week successfully testing it as resistance (second green circle.) From there, the bear market continued and BTC later failed to hold the 50 week as overhead resistance (second red circle.) Now, BTC has returned to the 50 week and we're currently testing it (yellow circle.)
In addition to the 50 week moving average, BTC also has the bottom of the black downtrend channelish formation that it's holding. So, there is a chance that BTC could catch a relief rally here. However, as I've shown in last night's analysis, I think price will inevitably test the 6000 support/resistance zone in red. That's the biggest area that is technically challenging BTC right now, and it's practically inevitable that BTC will test it.
On the RSI, we can see that BTC is entering oversold territory on the daily chart. However, that doesn't mean that BTC can't become even MORE oversold. Regardless, based on the fact that we are entering oversold territory, and the fact that BTC is at major support, I think there is moderate chance that BTC could see a short relief rally here. That can easily be confirmed by a hold clear hold of this area as support.
With that said, a relief rally even to 9000 would NOT change the fact that BTC is in a bear market downtrend. Remember, THE TREND IS YOUR FRIEND! Right now, the trend is clearly down, as BTC has printed nothing but lower highs and lows since June. The trend is ALWAYS your friend, unless you're trading against it.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-