The bitcoin price defied technical indicators once again, climbing back to $1100 over the course of this past week. However, technical projections have not changed, and continue to call for a downward dive.
Bitcoin Price Technical Analysis
According to Elliott Wave Theory, the bitcoin price bounce-back to the former $1100 support was supported by good news from Japan. The country’s government passed a law recognizing Bitcoin as an official form of payment, bringing an unprecedented level of mainstream recognition to the technology.
The excitement caused by this news acted as a relief that allowed the bitcoin price to accomplish the B phase before heading downwards again. As the price descends, it will test the last support level at $850. If that support cannot hold up, expect the price to continue falling to the $600 floor.
However, a continuing stream of positive news and bullish fundamentals could lead the bitcoin price away from the technical projections. Consequently, the price could manage to sustain at current levels. Bearish technical patterns abound, though, and a fall to $600 followed by a rebound to $850 still seems possible.
According to intermediate-range indicators, prices may head downwards from $1100 to $850. From there, a congestion area would emerge due to the weak bullish support at $850. Furthermore, if the price declines to the $600 floor, the $850 mark would act as a resistance.
The “C “ phase of Elliott Wave Theory could start this week as well, setting up a theoretical goal at $770, with weak support giving way to a bearish push to $600.
With a high level of volatility in a zig-zag pattern, the bitcoin price has slid downwards in the face of contradictory information coming from news and other fundamental factors.
In the current situation, $850 acts as a limit in two possible scenarios: A) the present distribution area will persist, with $850 acting as a support; or B) an aggressive round -trip needle dive to $600 and then back up to an $850 resistance.
According to Japanese Candlestick analysis, either scenario could play out depending on news, fundamentals, and trading volume.
What do you think will happen to the bitcoin price? Let us know in the comments below.
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This technical analysis is meant for informational purposes only. Bitsonline is not responsible for any gains or losses incurred while trading bitcoin.