Bitcoin (BTC) opened the day at $7,600 and began a sharp decline to reach lows of $6,800 – a loss of just over 10%. Since then, the price has been pushed back by $7,000, with buyers showing interest in prices below the $7,000 trade.
The loss in the Bitcoin valuation has dragged the entire market down, with Ether (ETH) considered a notable loser, losing support at $150 and bottoming out at almost -15% at $137.
The Bitcoin dominance has risen to 69% for the week, meaning that BTC has outperformed the rest of the crypto currency market during this week’s sustained decline.
Bitcoin is about 16% lower than the weekly opening price of $8,500. As the price fell toward earlier support at $7,600 and the 100-week moving average (MA), Bitcoin found no support and sold it beyond the 61.8% tracing down to the 65% tracing of the 2019 bull run, where it found interim support.
The gap between the Fibonacci retracement level of 61.8% and 65% is sometimes referred to as the “golden pocket” where traders want to profit from shorts or take long positions. So this may explain some of the reasons why we have found some support here. The 50-week MA also trades to support the price.
Typically, the 50-100 week moving average cross was an indicator of a bull market, and this is expected to happen in about two weeks. However, if Bitcoin has closed below the 100-week average in the past, the surrender followed. The 100-week MA is now at 7,600 dollars with the previous weekly support.
It will therefore be crucial whether the 100-week average and the $7,600 level now turn into resistance, which would be problematic for an optimistic scenario.
The bulls must therefore be careful to close the weekly candle above $7,600, which appears to be a high order. The main Fibonacci levels and weekly moving average support have now dropped to $5,000 levels, and this would normally be the bull’s absolute last line of defense.