The rejection from mid $5,300 at the top of what was probably an ascending triangle has sent Bitcoin (BTC) down for a much needed correction. But the leading crypto is showing a surprising amount of resilience, and has many traders and analysts waiting for the next leg down.
Heading into the weekend, where things historically tend to get a bit volatile, they might get it. Bitcoin has plenty of room left to the downside to have a healthy correction, without necessarily damaging the post-April-breakout market structure.
We can see this structure above. Several bands of support lie between the current price and $4,600, where the important 200 day moving average (MA) lies. Most (not all!) traders recognize this 200 MA as an important marker, and as a border zone between a bull and bear market.
Any price correction above this point would be uncontroversial and perhaps even welcomed as healthy. A fall below the 200 MA and below $4.5k, however, may be cause for concern.
Bitcoin’s resilience at $5,000 does not mean a new uptrend, however. The leading crypto has now been rejected twice at the 55 hour exponential moving average (EMA). Trading volume is very weak, only strong enough to continue suspending BTC just above the mark.
What’s more, the hourly RSI has begun to bearishly diverge from price, boding ill for a continued stay at $5k (below)
Moving away from the very small hourly time frame to the very large weekly, there is an interesting factor to note on the RSI.
Bitcoin has just barely broken through a key historic support/resistance (S/R) zone. But there is no guarantee that it will be able to maintain this penetration – it is just as likely and possible for the leading crypto to cancel out all its recent gains and revisit a lower RSI trendline, and make another retest of this zone at a later point.