Price of bitcoin reached lows of near $6100 yesterday but after finding some support, we are experiencing a rise in price today. It was only two weeks ago when the price was trading near $8500 and BTC has experienced an almost 30% decline from these levels. The price drop last week was unrelenting with day-after-day of consecutive losses. With such strong bearish momentum, this leads us to the question of whether today’s rise is only temporary before a continuation of the downward movement.

Bitcoin Daily Chart

A few signals point to the fact that we could be nearing the bottom for Bitcoins price. All-time lows of 2018 are now approaching. The current all-time low is around $5800, just 10% lower than where we are currently trading. Significant buying pressure is to be expected as we approach this and the $6000 mark. Bitcoin futures are no longer trading at a premium either which means some selling pressure will now be out of the market. When futures trade at a premium, there is additional selling pressure in the form of miners selling futures contracts to lock in profits.

Spot Price, September, & December Futures Chart

A noteworthy rise has occurred over the last two hours in the price of Bitcoin. Significant support came in to play at $6250 but price managed to rise back above $6400 on high trading volume. Price seems to be experiencing some resistance at the 50EMA. Price may trade in a range here for a while as traders place positions for the next big directional move. If the price starts to trade into a range, the longer it does so, the greater the likelihood of a bull flag. In the case of another break to the upside, resistance is expected at around the $6750-6850 point and at the 100EMA.

Bitcoin Hourly Chart

Key Takeaways:

  • 30% decline since two weeks ago
  • Bottom for the price was near $6100
  • Support came into play around $6250
  • Futures no longer trading at a premium resulting in some selling pressure coming out of the market
  • Price trading in a range now may result in a bull flag pattern
  • In the case of a break to the upside, resistance expected at $6750-6850 and the 100EMA
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