Bitcoin broke out of its descending channel on the 1-hour time frame to signal that a reversal is due. Price also moved past its double bottom to confirm that an uptrend is underway, but resistance around the $4,400 level held.
In the short term, we are likely to see a bounce as bitcoin looks cheap, given the heady days of five figures, delivering short-term rallies as a result. The next level of technical support is around $2,800, where the cryptocurrency may find some support, which could provide a solid platform. However, if this is also taken out, the next level is some way below. Much will now depend on investor confidence, which has been badly shaken. If investors believe that bitcoin will survive and flourish, this level could hold – if not, volume as always will reveal the true balance of sentiment and the future for bitcoin.
In the short term, we are likely to see a bounce as bitcoin looks cheap, given the heady days of five figures, delivering short-term rallies as a result. The next level of technical support is around $2,800, where the cryptocurrency may find some support, which could provide a solid platform. However, if this is also taken out, the next level is some way below. Much will now depend on investor confidence, which has been badly shaken. If investors believe that bitcoin will survive and flourish, this level could hold – if not, volume as always will reveal the true balance of sentiment and the future for bitcoin.