Bitcoin Pullback Continues | Correction Confirmed

Bitcoin Pullback Continues

The Bitcoin pullback continues as price falls as low as $7.4k. The daily chart above displays Bitcoin’s sequential indicator which is currently on a red 3 of 9 candle. Sequential is telling us there are 6 more days of potential downside momentum. As strong resistance forms around $8.3k, Bitcoin looks like it’s in for a 30-40% pullback.

4 Hour Moving Averages

Price recently bounced off the 200MA (orange) and has begun to consolidate. The 200MA has consistently provided support since the beginning of this uptrend. If price should break below the 200MA (orange) look for large downside price action.

Pullback Targets

Yesterday’s article took a look at historic pullbacks in Bitcoin bull markets. From 2016-2017, Bitcoin experienced 7 corrections of 40% or more. After Bitcoin’s best May performance ever, a pullback is expected. The chart above outlines possible pullback targets based on historic support and resistance levels. The first probable pullback target is the $6.4k price level. Bitcoin is likely to pullback to $6.4k before finding any buy pressure. Below is the $5k price channel. A pullback to this range would present a great buying opportunity and would serve as an excellent higher-low for the macro bullish thesis. The final and most unlikely pullback target is $4k. If price drops below this level, the Bitcoin ecosystem could be in serious trouble. Miners lose profitability at this price level and turn off their machines, thus lowering Bitcoin’s overall difficulty and security.

Conclusion

The Bitcoin pullback continues as resistance remains at $8.3k. Strong support currently stands at $7.3k and $6.8k. More downside price action is expected in the short term to an ultimate target of $6.4k. Look for a quality buying opportunity at this price range.