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The Bitcoin price has reached the lower limit of the current support area. However, the short-term structure does not yet indicate that we are in the initial phases of a reversal.

Bitcoin has been free-falling without showing any signs of a retracement since October 25. This is somewhat unusual since price decreases often bounce upwards once they reach a significant level.

Cryptocurrency analyst and trader @Josh Rager stated that the $7400 support area holds significant importance since it has often acted as support โ€” thus, it should be considered more important than the $7700 area.

However, the Bitcoin price has broken down below this level since the tweet.

Another popular analyst, @loomdart, identified $6900 as a more likely area for a bottom โ€” due to a descending support line.

Letโ€™s take a look at this pattern more closely and analyze if the Bitcoin price will likely make a bottom there.

Descending Bitcoin Price Support

The Bitcoin price has indeed been following a descending support line created by the lows of July 16. The line has been validated four times. Also, it coincides with the bottom of the support area at $6800-$7200. Therefore, it is a likely place to initiate a reversal.

Descending Support bitcoin

Descending Support bitcoin

However, in the short-term, the Bitcoin price is free-falling without a structure in place. Additionally, the volume has been increasing during bearish moves โ€” as evidenced by the massive volume during the hourly candle at 11:00 UCT+1.

Short-Term bitcoin

Short-Term bitcoin

Therefore, while it is possible that the Bitcoin price makes a bottom here, there is no short-term structure in place that suggests that the reversal has started.


Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.

Images courtesy of Twitter, TradingView.


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