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Bitcoin (BTC) Runs Into Resistance At 61.8% Fib Retracement Level, Price Yet To Crash

Bitcoin (BTC) Runs Into Resistance At 61.8% Fib Retracement Level, Price Yet To Crash
Breaking News / Bitcoin / Analytics

Bitcoin (BTC) declined sharply towards the end of the day yesterday. A lot of traders were quick to enter bearish positions but the market makers ended up giving them a run for their money. The upcoming crash is going to be very aggressive and market makers do not want retail traders riding BTC/USD all the way down to $7,200 or lower levels. It is thus not surprising to see that the price ended up running into the 61.8% fib retracement level once more. At the time of writing, the price has faced a minor rejection at this level but it is still possible for the price to rise above this level once again. It is easy to long the market but shorting the market is no small feat especially in the face of such bullish optimism.

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So, many of the retail bears have their stops close to very obvious levels because they want to minimize their downside and the market makers understand their psyche. This leads to a stop hunt around such levels and we see the price rising above it only to do what it is expected to do afterwards. We have more clarity after yesterday’s bearish close that the market is not ready for further upside. In fact, we are very close to the beginning of a new bear trend that is going to take the market by surprise. The reason I say it is going to take the market by surprise is because very few people are actually prepared for it. The Longs to Shorts ratio is still at 73.5% to 24.5% in favor of the bulls. This is quite a big gap which tells us how bullish the majority of traders are at the moment.

The fib circle seen on the daily chart is now very close to be broken to the downside. In one of our analyses we discussed the probability that this circle might have already broken but if that were the case then we would have seen a big crash by now which is why I think we might not have broken this circle just yet. Furthermore, the way this circle is drawn covers more points making it more credible. We have already seen BTC/USD form three tops and now it is only a matter of time before it crashes from here.

The price will face some hindrance at the 21 day EMA and the 50 day EMA as it declines but if it is to crash below the fib circle then that crash might be far more powerful to be stopped by these two EMAs. We might see the 200 day EMA serve as temporary support though but eventually the price has to decline to the 61.8% fib extension from the beginning of the parabolic advance which comes down to around $7,200. RSI on the daily time frame shows that there is plenty of room for further downside and the next few months might see the market experience a lot of pain.

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