Trading Bitcoin: $7.2k Target Low

$7.2k Target Low

Bitcoin is up 3.71% today as price rebounds to $8,151. While price is rebounding, the posture of the trend is still heavily bearish and today’s increase isn’t changing that. On the weekly chart above, Bitcoin is on a red 7 of 9 candle. Therefore, sequential is signaling a tentative trend reversal in 2 weeks. That said, the bulls were rejected last time resistance at $8.5k was tested. Additionally, if price experiences another sharp decline, the optimal support level would be the 0.618 fibonacci level at $7.2k.

Daily

After today’s price increase, Bitcoin is on a red 4 of 9 candle. While price broke below $8k briefly, Bitcoin quickly found support and is now testing upward resistance levels such as the 200MA (orange).

4 Hour

On the 4 hour chart above, you can see Bitcoin is on a sequential green 2. Roughly 8 hours ago, Bitcoin experienced a price flip after bottoming on a doji candle. Notably, this candle was also a red 8. However, price is still fluctuating at the 50MA (grey) and the bulls and bears continue to struggle over this support/resistance level.

Theoretically, a green 2 closing above a green 1 is a signal to place a long trade on a 4 hour time frame. Moreover, if price can close above $8.2k, there is a chance the reaction rally can continue up to the 128MA (green) at $8.8k. While Bitcoin may be bullish on the 4 hour, the daily and weekly timeframes are still leaning bearish.

Conclusion

Notably, Bitcoin has corrected 44% since it topped at roughly $14k. Still, the overall trend is in a bearish posture. Bitcoin continues to trade below the daily 200MA which is now acting as a critical resistance level. While Bitcoin is experiencing a reaction rally today, it is likely price will experience another eventual decline to the 0.618 fibonacci level at $7.2k. The timeframe for this estimated move is 2 weeks.

Disclaimer: The author of the article hodls Bitcoin.