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📈 Price Predictions
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Bitcoin Reaches Critical Support Area. Bounce or Break?

  • Thomas Hughes
    📈 Price Predictions

    The recent Bitcoin drop nullified all gains made during the last couple of weeks and demolished any short term hopes of a steady climb above $4,000

Bitcoin Reaches Critical Support Area. Bounce or Break?
Cover image via u.today

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

The recent Bitcoin drop nullified all gains made during the last couple of weeks and demolished any short term hopes of a steady climb above $4,000. The market cap shed $16 billion in a single day, currently standing at $122 billion and BTC/USD is currently testing a critical support level located at 3700.

Chart Analysis – BTC/USD

Last time BTC/USD touched the current level (3700), it recovered swiftly and managed to climb above the 200-period Exponential Moving Average on a 4-hour chart. Price also showed a strong reaction to the level in the past, so it’s safe to say that the way it will behave now will determine the next short to medium term direction.

BTC/USD chart

A bounce higher will take the pair above 3820 and possibly into the bearish trend line seen on the chart above. A move above the 200-period EMA will solidify the climb and will probably bring in additional buyers.

On the other hand, a break of 3700 will make 3500 the first target (BRN – big round number) and will open the door for a drop into 3200 area in the longer term. Even if this second target is reached, we will probably see upswings until the price gets there.

Support zone: 3700 (still intact at the time of writing), 3500

Resistance zone: 3820, 200 period EMA and the bearish trend line

Most likely scenario: unclear, depending on how the “bounce or break” scenario plays out

Alternate scenario: low volatility price action, no clear break or bounce

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About the author

Thomas Hughes is an executive editor of U.Today. He is a skilled cryptocurrency trader and technical analyst deeply immersed into the cryptocurrency & blockchain technology area.

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