Bitcoin slumped below $9,000 to hit 14 weeks low. The following technical analysis is based on the Elliott wave theory.
September 25, 2019 | AtoZ Markets – The cryptocurrency market continues the bearish run that started in late June. The market has shed over $160 billion in the last 12 weeks. Bitcoin has lost 11% in the last 24 hours after it broke below the $9,100 support level on Tuesday to hit its lowest price in the last 14 weeks. The flagship cryptocurrency is currently priced at $8,400 (at the time of writing this report).
It was almost inevitable that a bearish breakout would happen. After dropping to $9,100 in mid-July, BTC price went sideways to complete a 10-weeks triangle pattern. Throughout this time, price kept knocking at the support zone at $9,100-9,300 while making clear lower highs. Aside from this, the dip from $13,900 was meant to be the correction of the bullish phase that started in December 2018 and ran through the first half of 2019. At $9,100, the correction was deemed shallow. Lower levels at $8,500 (50% Fibonacci retracement level) and $7,200 (61.8% Fibonacci retracement level) looked more likely for the correction to look for a strong bullish signal. From a whole view, the dip from $13,900 to the current level is a correction. If the bullish trend resumes, strong surges to $25,000 or higher are expected.
Bitcoin analysis: important price levels
Resistance levels: After breaking below the $9,100-9,500 support zone, we would expect a strong resistance when the bullish trend returns
Support Levels: The critical Fibonacci levels at $8,500 and $7,200 could offer support. However, with the speed of this breakout, the dip could continue to $7,000 or lower.
Bitcoin price prediction: Elliott wave analysis
In our recent updates, we looked at two clear scenarios. While the focus was put more on a bearish breakout, we also stated the possibility of a surprising breakout upside. In the last update, the chart below was used.
Price eventually broke downside as the new chart below shows. The next call is to find out where we can expect bullish reversal patterns to signal the end of the bearish correction.
In the chart above, we use the Fibonacci ratio confluence method to determine the expected reversal zones. Fibonacci retracement of the rally to $13,900 was used and then the Fibonacci extension of wave w (circled) from wave x (circled) of the bearish correction.
First reversal zone: $7,200-$7,400
Second reversal zone: $5,400-$5,500. This zone looks more likely as it also has the support baseline of the corrective channel lay on it