Support At $105K Holds, But Bears Dominate

Support At $105K Holds, But Bears Dominate
Ethan Greene - Feral Analysis

Bitcoin weekly price forecast

I feel like a broken record saying this, but it bears repeating: Wow, what a difference one week makes! Bitcoin fell a bit as expected at the beginning of last week, but then the bears came in with a blow on Friday morning, as Trump’s talk of raising tariffs on China sent the markets into a tailspin.

Things escalated quickly after liquidity dried up in the afternoon with Bitcoin falling to a low of $105,617 on the index price. The price action was a bit chaotic as some leveraged exchanges dropped to $102,000 and even $100,000. After the carnage ended, Bitcoin made a nice bounce to close the week at $115,128. However, the bears are still firmly in control, as long as the price remains below $118,350.

Key support and resistance levels now

The price fell deep through all of the newer support levels last Friday, but the $105,000 support level managed to establish itself, supporting the price for the time being. The bulls will now look for this lower level to hold, but if we lose it, we will again look to the $96,000 level for support. A close below that level would almost certainly put an end to this bull market for the foreseeable future.

We can draw a Fibonacci retracement from the high of $126,219 to the low of $105,617, opening up a wide range of price action. The bulls can start reclaiming resistance levels above the 0.618 Fib retracement level at $118,350, with new highs expected if the bulls can close for a few days above the 0.786 Fib retracement level at $121,800.

Forecast for this week

A big bounce was expected after this massive sell-off, and we got there with the weekly close. So it’s hard to know what to expect this week. The oscillators on the daily chart are still bearish, but not excessively, so the bulls still have a chance to save face here. Over the next few days, bulls will want to avoid closing any days below the 0.236 Fibonacci retracement level at $110,500, as that would trigger an open lower at $105,000 again.

On the flip side, the bears will look to keep the price below the 0.618 Fibonacci retracement resistance level at $118,350. Getting above here flips the bias towards the upside in the short term, but they have an uphill battle to do so. We have a neutral zone between $112,000 and $118,350, with $115,630 acting as a barrier to the bullish and bearish bias within this zone. Therefore, we may see Bitcoin stuck in this area over the next few days.

Market mood: Bearish – After an epic dump on Friday, bulls are stunned. Even the bears didn’t know they could hit so hard. While the price made significant gains to close the week well above the bottom, the bulls still have more work to do to regain control of this price action.

The next few weeks
Interestingly, last Friday’s low price reached the lower trend line of the expanding wedge pattern on the daily chart. It is still possible for the price to head back to the upper trend line of this pattern again. However, we still have to be aware of the fact that this expanding wedge pattern can also break down, forming a long-term top in the market.

Bulls do not want to see any daily close below this lower trend line, as that could signal a breakdown that would likely drop to the low $80,000 range at a minimum. A return to the upper trend line of the expanding wedge (around $127,000) would have bulls looking for an upward breakout of this pattern again.

Bulls will be walking on eggshells over the coming weeks. They do not want to see any price action near $105,000 again, and will face intense pressure to push the price back above $122,000.

Terminology guide:

Bulls/bullish: Buyers or investors expect the price to rise.

Bears/Bearish: Sellers or investors expect the price to fall.

Support or support level: The level at which the price of an asset should remain, at least initially. The more it touches support, the weaker it becomes and the more likely it is to fail to hold the price.

Resistance or resistance level: In exchange for support. The level at which the price is likely to reject, at least initially. The more touches there are on resistance, the weaker it becomes and the more likely it is to fail to hold the price in check.

Fibonacci retracements and extensions: The proportions depend on what is known as the golden ratio, which is a global ratio related to the cycles of growth and decay in nature. The golden ratio is based on the constants Phi (1.618) and phi (0.618).

Widening wedge: A chart pattern consisting of an upper trend line that acts as resistance and a lower trend line that acts as support. These trend lines must diverge from each other in order to validate the model. This pattern is the result of widening price volatility, which typically results in higher highs and lower lows.

Oscillators: Technical indicators that vary over time, but usually remain within a range between specific levels. Therefore, they oscillate between a low level (usually representing oversold conditions) and a high level (usually representing overbought conditions). For example, the Relative Strength Index (RSI) and Moving Average Convergence and Divergence (MACD).

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