Bitcoin is down by 20% this week and is now close to recording its biggest weekly loss in 2019. Is it time to buy? What should traders look for?
September 27, 2019 | AtoZ Markets – Bitcoin is about to make its biggest loss in a week since the 2019 bearish correction from $13,900 started. The premier cryptocurrency tested the support neckline of a descending triangle on Monday before it finally broke below it on Tuesday. On Friday, BTCUSD touched below $8,000 on all the major exchanges. Currently (at the time of writing), it’s priced at $8,000. If by next Sunday, BTC has not surged above $8,500, it will be the biggest loss in a single week ytd. Prior to the current dip, the biggest Sunday-to-Saturday weekly loss happened between January 6 and 12 at -13%.
Meanwhile, despite the current dip, the bullish trend is generally expected to continue. The current bearish correction might extend till next week to start the last quarter of the year but the next bullish phase is expected to be stronger than the one seen in the first half of 2019. A big surge that should break above the $19,800 all-time high will most likely happen.
Bitcoin analysis: important price levels
The most significant levels are the support levels below the current level, where we will be expecting a big bounce.
Resistance Levels: The major resistance level is the 9,100-9,500 support-turned-resistance zone.
Support Levels: Before the breakout happened, $8,500 and $7,200 were the levels to watch being the 50% and 61.8% Fibonacci retracements levels of the December 2018 to June 2019 bullish trend. Price has breached below $8,500. We will watch for signs of reversal at the 7,200-7,400 zone.
Bitcoin price prediction: Elliott wave analysis
Since the breakout on Tuesday, our attention has been shifted to the possible reversal zones. In the last update, where we used the chart below, two Fibonacci measurements from different swing levels gave us two possible reversal zones.
The corrective pattern from $13,900 is clearly emerging into a double zigzag pattern with a triangle X. Taking Fib retracements of the preceding bullish trend and the Fib-projection of wave W from X to get Y, we had Fib-confluences at $7,200-$7,400 and $5,400-$5,500.
Wave Y (circled) is expected to be a zigzag pattern to complete the larger double zigzag structure. A minor bounce to retest $9,100 might happen (wave (b) of Y) before dropping further. The second reversal zone, therefore, looks more likely.