Analysis: Bitcoin drops more than 5% in 24 hours, what’s next? -Blox

Bitcoin fell from around $64,500 to $60,500 today. This 5% decline puts the currency in a danger zone. If Bitcoin doesn’t recover here. The price could fall towards the low of $56,500. Let’s take a look at the charts.

Can BTC recover from here?

We will start this analysis by taking a look at the daily chart. Here each candle represents 24 hours which gives us a good idea of ​​the daily candle and the main support and resistance levels. The latter are shown as a red area, blue lines, and a red line.

The red zone has been a major support point for Bitcoin for some time now. Almost every time the currency approaches the bottom of this area ($62,000), it recovers in a short time. There was one instance where the coin dropped further – this is indicated by the red line ($56,500) – but each time the coin bounces back, so there is hope that Bitcoin will bounce back now.

If the currency remains strong here, it would be good for Bitcoin to rise above the red zone again. As you can see, there are a few price points below where the coin can find support, so the decline will be sharp and fast if the price manages to break completely below this level. The day is not over yet, so hopefully Bitcoin can recover before these 24 hours are up.

Bitcoin decline

The decline in recent days can be explained by Bitcoin pulling back from a sideways movement (between the blue lines). This can be seen better if we zoom in on the image. That’s why we’ll also take a look at the four-hour chart of Bitcoin. Here each candle represents 4 hours.

The blue lines originate from a previous low and high, and the currency initially refused to allow the price to move beyond either of these levels. As I mentioned in previous analyses, a break of these lines would cause Bitcoin to move further in this direction.

When Bitcoin later moved below the lower blue line, further downward movement was confirmed by a negative test. This can be seen in the orange circle. Hopefully the decline is over now, but of course we can never be sure. It is important to monitor these price levels to be able to say more about the price.

If Bitcoin closes below the red zone, the chance of a decline towards $56,500 increases, but if the coin recovers from here, it could remain positive in the long term. This still forms a higher low on the daily chart.

This obviously does not apply to the 4-hour chart, where a downward trend has been in effect since the break of the lower blue line. There is no doubt that the combination of two downtrends is bad, but the long-term trend is still ahead, and there is still room for recovery. Therefore, these levels must be monitored closely.