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 — thus, it should be considered more important than the $7700 area.
$BTC– After zooming out, we can see that the current support $7400s is in fact an area of interest (high volume node in the VPVR to the right)
And has acted as support/resistance for a while – since October 2017
And is showing to be more relevant of a level than $7700 pic.twitter.com/OYSF1BuDTw
— Josh Rager 📈 (@Josh_Rager) November 21, 2019
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 — due to a descending support line.
6900s hold as bottom for a while IMO pic.twitter.com/KUNh8Kysey
— Crypto Loomdart (@loomdart) November 22, 2019
Let’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.
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 — as evidenced by the massive volume during the hourly candle at 11:00 UCT+1.
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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