After a heavily volatile week across global markets, the crypto markets have seen its fair share of volatility. A major event has dragged down the entire crypto space, as LUNA and its now depegged UST pair saw its demise, falling quickly from 100 dollars to 0 on the majority of exchanges.
At the same time Bitcoin has dropped steadily from its 40.000k resistance level for a whopping 37% in price, it now seems to have found its support at the 25.000k support region, and since then stabilizes itself into the range.The question is now, has Bitcoin bottomed out, and what levels can we look for next?
If you have followed my previous coverage in Bitcoin, then this sideways channel will not be unfamiliar for you. Bitcoin has been trading relatively quietly in a sideways range since January 2022, where after multiple rotations, it ultimately rejected from its key level at its center of the established channel and $40.000 key level.
While trading at this key level we have seen significant increases in the amount of interest building, signaling a conclusion of the sideways market to come. As we started dropping below support after chipping away significant liquidity multiple times (fig2.) the line in the sand has been crossed, with very little support below those levels. This allowed bitcoin to travel rapidly in a downward direction, where it now has found support at around $25.000, currently trying to establish yet another range.
This range gives us some fresh information that we can use to make an informed decision going onwards. In fig3 above we have now established a more local framework in which we can class its upper section in between $30.000/$32.000 as resistance, and $27.000/$25.000 as support, with its median in the middle.
Forming a range after a strong directional move is a sign of healthiness, which can be classed neither as bearish, or bullish, but rather neutral. It is a sign that price is taking a breather before deciding which direction to trade next. The probabilities of which way it breaks would currently be sat at 50% to the upside, and 50% to the downside. Therefore in an attempt to wrap up this article it is important to manage one’s expectation, and better off looking to trade the current range instead of over-expecting major price swings from here on out. Once the range breaks, there will be more clarity. Until then, these are the levels I am looking at.
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