- Bitcoin has dropped under $18,000 again, showing further weakness after topping out at $19,800
- It has lost a two-month uptrend and is now engaged in a downtrend
- $16,200 could be in play if it shows further weakness
Bitcoin suffered an anticipated drop over the last 24 hours, tapping $17,700 in a further show of weakness after its all-time highs two weeks ago. It has now dropped through an uptrend that has been in place since mid-October, with the potential for a further drop to the $16,000s if the current support level is lost.
Bitcoin Loses Two Month Trend Line
As we theorized yesterday, Bitcoin was set for a further spell of red having failed to reclaim support at $18,600. After a brief rally to $18,430 Bitcoin suffered the expected drop, losing a key support line in the process:
This support line, which has already acted as resistance, could be key in determining Bitcoin’s short term direction. If it closes the day below it then that will confirm the end of an almost two-month continuous uptrend:
Bitcoin’s weakness since $19,800 has now resulted in a clearly defined downward channel:
Of course we have no way of knowing how long Bitcoin will continue this downtrend, but a reset is needed after such a long and powerful uptrend. Bitcoin is currently sitting at a recently established support level that has been tested four times since the end of November, and typically any increase past three knocks on the door results in it being opened eventually:
Should, as expected, Bitcoin take the opportunity to reset further, the recently tested support at $17,650 presents the next potential stopping point. Beneath this is a rejection turned support at $17,200 and much further down is $16,150, which would represent an 18% correction from the top.
While such a drop would of course be bad news for Bitcoin holders (in the short term), it would very likely precipitate an alt season throughout December before Bitcoin begins another push to all-time highs in January.
