Trading Bitcoin: $6k Incoming?

$6k Incoming?

$6k Incoming? After topping at roughly $14k, Bitcoin has retraced as much as 28% to a low of $9.5k. Currently, Bitcoin has rebounded and is trading at a price of $10.3k. On the daily chart below, Bitcoin is on a red 3 of 9 candle and is giving traders a bearish signal. In yesterday’s article we noted,

“Just as a green 2 closing above a green 1 is bullish, a red 2 closing above a red 1 is bearish.”

If you exited your position or shorted based on the sequential red 2, you would have saved or made as much as 8% overnight. Furthermore, Bitcoin’s technicals will likely continue to give off bearish indicators as our current correction continues. However, there is a strong support cluster at $9.5k. As you can see on the daily chart above, price corrected down to $9.5k and then bounced off the sequential setup trend line (green dotted line). The $9.5k support level is guarded by both the 50MA (gray) and the 0.382 fibonacci level.

NVT Indicator

The NVT indicator has had 100% historical accuracy (12/12 since 2011) when calling overbought and oversold conditions in Bitcoin. Currently, the NVT indicator dropped to the critical support level at 150. If the NVT falls below 150 and price also falls below $9.5k, look for a steep correction into the $6k – $8k price channel. While past performance does not always predict future results, there is a massive cluster of indicators warning us that a break below $9.5k will send Bitcoin into the depths of the crypto abyss.

Cryptocurrency News

Arthur Hayes, CEO of BitMEX, and economist, Nouriel Roubini, will debate tomorrow at the 2019 Asia Blockchain Summit. Tension has been growing throughout the previous month as trash talking across social media has increased. Roubini is one of the most prominent economists to perpetually criticize Bitcoin. Either way the debate should be entertaining for any crypto enthusiast.

Conclusion

If price can break above $10.8k, the bull market will likely continue and buying pressure may resume. If price cannot hold support at $9.5k and the NVT indicator falls below 150, Bitcoin will be in a lot of trouble. Look for a buying opportunity in the $6k – $8k price region if a correction of this magnitude should occur.