Bitcoin recovers even with 'COVID-20' fears — but is the improvement now over?
Bitcoin (BTC) price has been on a scratch in recent months, leading to a new all-time high at $24,200. Though, BTC saw an improvement on Dec. 21 as the equity markets also unlocked in the red. Bitcoin’s price fell by 6% on Monday, though the U.S. dollar currency index (DXY) cut a strong bounce.
Such falls and doubt appear to be due to the reported occurrence of a mutated coronavirus strain in the United Kingdom and, so, more restrictions on the prospect, which could have a high impact on the markets, as realized in March.
Bearish deviation playing out for Bitcoin:
1. On the 4-hour chart, a bearish deviation displays the breakdown from $24,000 to Monday's loss of $22,000.
2. Though, zooming out, this is still considerably higher than Bitcoin’s price three months ago, while such alterations are very mutual in both bull and bear markets.
3. Subsequently, such dips should not clip experienced traders by wonder. In that respect, the stages to watch are presented in the chart above. But for the bearish deviation to confirm, Bitcoin’s price should reject the earlier area of resistance.
4. If that discards at $23,400 to $23,600, more downside is on the table and the complex time frame levels will be tested as care. Though, if this $23,400–$23,600 region disruptions the benefit, a new all-time high earlier the year's end is expected.
5. The only level to look out for Bitcoin at this point is the part around $18,500. This weekly level has many meetings around the preceding all-time high and is the last region of merging.
Remarkably enough, founded on the weekly chart, a drop near $12,000 would still give a bullish viewpoint to the chart. Though, such an improvement would be knowingly larger than any standard 20% to 40% bull market rectification. But even such a severe 50% drop would not essentially break the bull market cycle and would exist a great "buy the dip" prospect.
CBW - External Analyst