Trade Idea of the Day: Bitcoin to Test $5922?
Fiona Cincotta March 14, 2018 1:31 PM
With just two winning sessions in the last 10, once again things aren’t looking so good for Bitcoin. After a heavy sell off in February which took Bitcoin to a low of $5922, Bitcoin continues to look vulnerable. Whilst the bulls thought they were back in control, failure to push beyond 12,000 gave the Bitcoin bears an opportunity to push lower.
What: With just two winning sessions in the last 10, once again things aren’t looking so good for Bitcoin. After a heavy sell off in February which took Bitcoin to a low of $5922, Bitcoin continues to look vulnerable. Whilst the bulls thought they were back in control, failure to push beyond 12,000 gave the Bitcoin bears an opportunity to push lower.
In sharp contrast to 2017, which was a phenomenal year for the Bitcoin, 2018 has not been such a good year for the crypto currency so far. From mid-December through to early February, Bitcoin came under heavy selling pressure, which saw the virtual currency lose around 70% of its value. It hit a nadir of $5922 on 6th February, before rebounding higher to $11784 just 2 weeks later. However, the price failed to push beyond heavy resistance seen at $12,000, instead falling back below the significant psychological level of $10,000 on the news that Binance, a Japanese crypto currency exchange was hacked, flaring fears over security once again.
How: 2018 has seen Bitcoin drop over 30% to date, but the big question is does it have further to fall? The next important range for Bitcoin is from the region of 7175 – 7690, within this range is the 200-sma. The 200 sma has provided a solid support for the price, even at the previous nadir back in September the 200 dma held very well. So, a break through this level would be a significant event and increases the probability of the February low of $5922 being taken out.
On the upside, Bitcoin would need to see a sustained move above 9322, the low reached on 26th February for things to stabilize. Bitcoin is currently trading 4.5% lower at 8640.
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