Should Bitcoin Fall to $10,600, a Move Under $10,000 is Likely

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Bitcoin Price Outlook

Hours ago, Bitcoin was trading at $10,800, down over 5% on the day as a result of overwhelming sell-side pressure. But, all of a sudden, the cryptocurrency bounced, gaining around 4% in minutes. And as of the time of writing this, BTC sits at $11,300, down 2% in the past 24 hours. What levels should investors be watching out for?

Well, according to Jacob Canfield, a popular trader, all eyes should be in and around $10,600 right now. This level is where Bitcoin’s 200 exponential moving average (EMA) meets the 0.236 Fibonacci Retracement of $14,000 and an uptrend. If BTC loses the 200 EMA, which has acted as clear support since February of this year, Canfield notes that Bitcoin could see a sharper correction to the also important 50 moving average around $9,900.

$XBT / $BTC / #Bitcoin / #BTC
The 200EMA has acted as a support on the 240 (4 hour) since Feb 2019.
This also lines up with the .236 and trend line support.
If the 200EMA breaks (on a closing candle), expect a deeper dive to the 50MA on the daily around $9900. pic.twitter.com/PB3YltBqyw

— Jacob Canfield (@JacobCanfield) July 13, 2019

And right now, the outlook for some traders seems to be more downside. As seen below, Level’s Josh Rager noted that Saturday’s candle was not entirely bullish, in that it closed under the weekly resistance zone, which sits around $11,400 and $11,500. And, Rager noted yesterday that if BTC doesn’t manage to hold $10,900, bulls may lose hope.

$BTC daily close still under weekly resistance but the candle didn't "engulf" the previous candle
With last minute buyers, it's encouraging to see a possible opportunity for Bitcoin to close above weekly resistance
Would be bullish if Sunday's candle closes above Sat's candle pic.twitter.com/LXWGpTYAzs

— Josh Rager 📈 (@Josh_Rager) July 14, 2019

Also, Bitcoin, according to Chonis, is forming a clear head and shoulders pattern on its four-hour chart, one that some say will break down due to selling pressure.

Also, Peter Brandt notes that Bitcoin’s parabolic pattern, which originated in December of last year, has finally broken.

A rendering $BTC pic.twitter.com/o8AkdUVelq

— Peter Brandt (@PeterLBrandt) July 13, 2019

With this, some are wary that a large correction could ensue, one that could bring Bitcoin back to $7,000 or even pre-rally levels in the $4,000s and $5,000s.

You see, when parabolas correct in financial markets, they correct hard. In Bitcoin’s case, this is especially relevant, as it exists as an early-stage asset that is hyper-volatile and reflexive.

As Brandt, a legendary commodities trader, recently quipped, a violation of the parabola could send BTC falling back to Earth. In fact, he quipped in a tweet that the cryptocurrency could lose 80% of its year-to-date high value:

“If current parabolic phase is violated, we could expect either an 80% correction of 7-month advance or much smaller correction w/ definition of new parabola w/ shallower slope. $BTC Note formation of possible 2-wk H&S or H&S failure”, the long-term Bitcoin proponent wrote.

Title Image Courtesy of Andre Francois Mckenzie Via Unsplash

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