We can see that besides the support area at $7,200, the next is way below around $5,000-$5,400.
Don't fight it bullas https://t.co/hANCQCy0ss— COFFEE TRADES☕ (@overheardcoffee) October 18, 2019
Bitcoin Volume ProfileLooking at the volume profile, we can see that the majority of the trading has been inside the $7,800-$8,200 area. Additionally, we can see a complete lack of buying power between $5,500-$7,500. The next level with significant buying power is found at $5,000-$5,500. Therefore, this indicator completely agrees with the hypothesis laid out in the tweet.
Trading PatternHowever, we can also see that the price is trading inside a descending wedge. The support line is descending, so it is more likely to provide support to the price going down to the low $7,000s. Additionally, while the main support area is found near $7,800, there is minor support between $7,000-$7,200. This was especially visible in the long lower wick on May 17. Finally, there is some bullish divergence developing in the RSI. This reduces the chances of a possible breakdown. To the contrary, combined with the creation of a bullish pattern, it makes an eventual breakout somewhat likely. BeInCrypto previously discussed this hypothesis in full here.
SummaryThe price is trading inside a major support area at $,7800-$8,200. However, it is also trading inside a descending wedge. Therefore, we believe the wedge is a better indicator of the final support before the price heads to $5,400. So, if the price breaks down from the wedge it is likely to reach $5,400. If not, the $7,000 support level is expected to initiate a reversal. Do you think BTC will initiate a reversal or will it head towards $5,400? Let us know in the comments below. Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
In line with the Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult with a professional before making any financial decisions.