Yesterday Bitcoin’s price was $6571 at the height, from which the price dropped to $6436 today which is only a 2% decrease. But the fact that the price went below the horizontal support at $6516 could be interpreted as a hint that a breakout from the current symmetrical triangle in which the price action is could occur from the downside.
Take a look our Live Bitcoin Price Chart
Looking at the hourly chart you can see that the price broke the minor uptrend support line as well and is currently retesting the horizontal support level from above for support. The price dipped below the $6516 horizontal support creating a U shaped bottom, but the momentum slowed down aggressively when the price went above it again leaving two large wicks from which we can see that the price has entered sellers territory.
Zooming out to the 4-hour chart you can see my Elliott Wave count as well as my projection. After a complex correction occurred the trend continuation will follow and the current minor corrective structure is the second wave of an impulsive downward wave whos target I have projected to be around $4700.
Zooming out further into the daily chart you can see where the horizontal support levels come from as well as other significant levels as the bold black line which is the baseline support of this downtrend.
Looking at the daily chart you can see that I have pointed out two targets. First is my primary one which has been projected using Elliott Wave principles and it is on the baseline support and the horizontal support at $4640 or somewhere in that vicinity of $4700. This scenario would be in my mind valid when the price breaks the horizontal support at $5767 as that zone serves as a strong support.
The second target has been calculated as a half from the vertical side of the triangle and then projected on to the expected breakout level. As you can see the red triangle’s support was broken in the past weakening it every step of the way, which is why I think it’s not going to hold now as well. If the price breaks the support at $6390 then I would expect the price to start dropping in a straight line downwards with a long red candle. The projected target for this scenario in which this triangle is a dominant pattern is at $4000.
Zooming back to the hourly chart with knowing my projections and the significant levels you can now see my expected breakout zone.
This area is of utmost importance, what happens here will in my mind determine the course of the market in the upcoming period. This zone is the intersection of three significant levels: horizontal support, triangle support, and the minor symmetrical triangle support. If all of those three combining cannot hold the price than a long red candle is almost a definite scenario. That is why I consider this zone important.
I am expecting a breakout from the downside because the horizontal support has already been broken today, the red triangle’s support has been broken in the past when the price found support on the symmetrical triangle’s uptrend line which was respected in the past. If that last support gets broken than we are definitely seeing a lower low which would be below $5767.
So to answer to the question in the title, it could get really bad.