Bitcoin Drops Considerably After Failure to Break All-Time High

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In Brief
  • The Bitcoin price has broken down from a parabolic ascending support line.

  • Technical indicators have turned bearish.

  • BTC has broken down from a short-term parallel ascending channel.

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In the early hours of Nov. 26, the BTC price was subject to a rapid decrease, dropping by nearly $1,700 in a matter of hours.

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The price has broken down from a bullish structure that had been in place since the upward move began to accelerate in September.

It is possible that BTC has begun a corrective trend.

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Bitcoin Parabolic Support Breakdown

The Bitcoin price had been following a parabolic ascending support line since Sept. 5, when the entire upward move began. Following this line, BTC reached a high of $19,490 on Nov. 25, slightly below the all-time high price of $19,666.

On Nov. 26, BTC created a significant bearish candlestick, broke down from the support line, and began a downward move that is still ongoing.

After 36 days in overbought territory and multiple bearish divergences, the daily RSI has finally decreased below 70. In addition, the Stochastic oscillator has made a bearish cross and the MACD is also decreasing.

Therefore, it is possible that the upward move has ended.

BTC Chart By TradingView

If BTC continues decreasing, the two most likely levels to complete the correction are found at $15,800 and $13,500. These are the respective 0.382 and 0.618 Fib retracement levels of the entire upward move.

The 0.5 Fib level at $14,640 is also likely to provide support, however it is not a horizontal support area.

BTC Chart By TradingView

Short-Term BTC Movement

The two-hour chart shows that the price broke down from a parallel ascending channel that had been in place since Sept. 18.

Short-term technical indicators have turned bearish. Both the RSI and MACD are decreasing and the former has dropped below 50.

Therefore, while a bounce could occur, possibly to validate the support line of the channel BTC just broke down from, the price is expected to eventually also break down from this support area.

BTC Chart By TradingView

Conclusion

To conclude, Bitcoin’s breakdown suggests that the price has now begun a corrective movement which could take the price back to $15,800.

For BeInCrypto’s previous Bitcoin analysis, click here!

Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto

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All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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