BTC Price Fibonacci Analysis by CryptoVerax 2021/05/20
Key Takeaway: We need to watch out for how far the BTC price will drop to see if this bull market is indeed ended or still alive; the $27,000 level could be very important.
Bitcoin is taking a wild ride again!
The recent price movement reminds me of the BTC chart from the end of 2017 to the early 2018 when Bitcoin price sharply dropped and suddenly came back up; many of us nearly threw up then… but now I think we all have a strong stomach to ride this out.
So, let’s review together what just happened in this bull market and think about the next step.
Firstly, the so called “Crypto Winter” ended when one BTC went over around $10,000 on 2020/07/27 (around 19:00 (GMT +3 hours)). After the market observing that the price did not break below the trend line, the price skyrocketed as you can see below.
On 2020/12/16, the BTC price broke above the resistance around $20,000 (which was the highest price in the previous bull market. )
Next, the price reached the all-time high around $65,000 on 2021/04/14. The price however started to drop shortly after.
Now, let’s draw the Fibonacci levels to understand the downward trend in the short term by connecting the recent lowest price in this bull market, which was 2020/03/13 around $4,000, and the recent highest price mentioned above.
If you looked at the 0.382 Fibonacci level, which is the price level the same as the highest price in January ($42,000 on 2021/01/08), you can see that this level was broken in three days. If you see the orange circled area below, it had been bouncing the 0.382 Fibonacci level; on the fourth try of going down (which was 2021/05/19 around 4:00 am), it finally broke below the 0.382 Fibonacci level.
On 2021/05/19 around 16:00 pm, the price dropped to the support line around $30,000, which was under the 0.50 Fibonacci level; this could be interpreted as the the upward trend was not as strong in this bull market.
(When the price breaks below the 0.618 Fibonacci level, we can conclude the bull market ended.)
Having said that, it is not as easy as the BTC price goes up back again soon just because we are still in an upward trend in this bull market; in order to for this bull market to continue, we have to end the recent downward trend. The below is the Fibonacci retracement in reverse drawing a line between the recent high-low. We cannot assume that the recent downward trend ends until the price breaks above 0.618.
So, what is gong to happen?
We need to first see whether the BTC price will go down below $30,000 or not, which I previously mentioned as the support (at least this support worked on 2021/05/19).
Next, we need to see whether the price breaks below the 0.618 Fibonacci level (this signals the end of this bull market and perhaps another long bear market) or keeps itself above it (meaning this bull market is still alive. ) The $27,000 level is something to watch out for.
The above references merely an opinion and is for information purposes only. It is not intended to be investment advice.
