Bitcoin Dumps, Finds Support Above $9,300

While it has bounced at the minor support area at $9,350, the most likely scenario is another downward leg towards $9,000.

Ascending Triangle

The Bitcoin price had been trading inside an ascending channel since May 14. After making three unsuccessful attempts at breaking out above the resistance line of the triangle, the price broke down from it on May 20. At the time of writing, it was trading inside the minor support level of $9,350. The breakdown is legitimate, since it occurred with extremely high volume, the highest since the creation of the triangle. Furthermore, BTC seems to have lost the support of the 200-hour MA. If it does not reclaim it, this would be another bearish sign.

An interesting development during this decrease is the movement of 50 Bitcoins that had been held for more than 10 years, as pointed out by the BeInCrypto Twitter account:

A #Bitcoin address that has been dormant since the first month of #BTC’s existence has just moved 50 Bitcoin. Is that you Satoshi?

Looking at the 30-minute candlesticks, while the volume is clearly lower during the increase, it is not so by much. While the price seems to be retracing, the most important level is found at $9,560-$9,620, between the 0.5-0.618 fib levels. If the price manages to move above it, then this will be just a fake out before the price once again makes another attempt at $9,900. However, the early signs are that the breakdown is legitimate and the price will continue decreasing.

Future Movement

There are two outlines for the future movement:

• If the $9,350 area holds and BTC retraces above the fib resistance outlined in the previous section, it will likely make another attempt at breaking out.
• If the area fails to support the price, the BTC will likely decrease and validate the long-term ascending support line, which is currently at $9,000.

The ascending support line is drawn since the March 14 bottom. Currently, it seems that the BTC price is creating a long-term five wave Elliott formation. If so, it is currently in the fourth wave, which will possibly transpire inside a symmetrical triangle with an a-b-c-d-e wave count. This would allow for the possibility that BTC will eventually break out after consolidating inside this triangle and create its final upward leg, which will take it above $10,000. On the other hand, a breakdown below the ascending support line would invalidate this possibility.