- Bitcoin suffered a $593 correction yesterday to ruin the alt setups of many and act as a reminder to take profits when they are offered
- The correction means a downward trend has been established which Bitcoin will now have to break
- Bull run is still intact even if Bitcoin drops back under $10,000
Bitcoin had been operating within a channel for almost a month, which has given alts a great opportunity to run, but as we know with Bitcoin it never lies still forever. This proved to be the case as it dropped from the $11,705 to $11,112, dropping through the bottom of the channel and threatening a deeper correction:
However, Bitcoin now seems to have stabilized after wicking down and coming back into the lower band, where it looks to be on the verge of edging back into the channel again. The fact that it didn’t dip below $11,000 is good news (for now), and it was accompanied by decent volume.
Bitcoin’s path from here is fairly straightforward. A clear downward trend has now been established on a lower timeframe, with the likelihood being that Bitcoin will come back to test it in the coming days, if it gets that far:
The implications of how Bitcoin deals with this new resistance line are fairly obvious – should it break through and use it as support then the path is clear for another attempt at $12,000, but should it fail then we are looking at $10,000 and possibly the CME gap at $9,700 as a potential bounce point.
Even a drop down to this price point would not invalidate the bullish momentum – in fact a correction down to those levels is almost expected after the rampant rise we have been enjoying since March. When viewed in a weekly context, such a move is about as obvious as it gets:
If Bitcoin were to drop below $10,000 there would be much gnashing of teeth, tearing out of hair, and portents of doom.
And that’s when you buy.