Bitcoin made a spike past resistance at $7800. In a previous post I listed several reasons that a short-term price retracement can be expected:
- Several indicators show that the market is "overbought". Bulls are losing power as bears begin to create selling pressure. The RSI, for example, shows strong evidence that a short-term price reversal is underway.
- Price has successfully reached the historically strong resistance level at $7800. This zone is historically a major zone of support and resistance. As a result, it is an ideal target zone where traders will attempt to take profits from their investments.
- A strong trending support line is established. This suggests that prices could revisit targets below $6800 before finding support for further rallies.
- Key Fibonacci retracement levels correspond with potential support levels at both $6800 (0.5 retracement) and $6500 (0.618 retracement).
After the most recent pump to $8300, it looks like a retrace to $6750 (.612 retracement) is not only possible but would present the most attractive price for long positions.
What are your thoughts? Please share below.