The trader Ilya Meshcheryakov explains the current market situation.
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Just a day after my latest overview of the leading cryptocurrency, Bitcoin managed to break the triangle to the downside and fall by more than $1000, but the potential move has not yet been exhausted.
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As I wrote earlier, the triangle’s potential stands at about $1600, which corresponds to a drop to around $17 300, where a strong support level also lies.
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A deeper decline would be a rather troubling sign, as the price would clearly leave the $18 000-$19 800 consolidation, and you can’t chalk it all up to a false breakout. Such a scenario would trigger a downtrend with the next target of $16 500.
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The formed triangle on Bitcoin’s price, broken downwards on December 8, with the indicated downside target, based on its height. The BTC/USDT hourly chart from TradingView.
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Earlier today, media reported that Bitcoin mining selling activity reached the highest level in three years — only back in early 2018, at the onset of a broader market downturn, were higher figures recorded. This confirms my thought from the previous overview that staying above $20 000 will be very difficult when “every hodler is in the green.”
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Nevertheless, given such mass selling, the leading cryptocurrency is holding up well — it is clear that buyers are not allowing sharp dumps and are keeping key levels, so 2020 may yet offer bulls new all-time highs.
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A more local chart shows us a flat with a range of $18 000-$18 500; the price could trade there for a while, providing decent opportunities to operate from its boundaries with limited risks. The priority, however, is selling from the upper bound, as false breakouts of the resistance level are significantly less likely in this scenario.
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Local sideways movement with marked support and resistance zones. Fifteen-minute BTC/USDT chart from TradingView.
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Thus, Bitcoin has broken the uncertainty with a strong impulsive move and signalled to the market that, in the medium term, it is headed downward.
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The targets of this move are already close to being reached, yet a break of $17 300 could form a longer downtrend. Local ideas, however, mainly relate to operating within the current flat with bounds at $18 000 and $18 500.
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