Bitcoin outlook: Violation of key supports risks deeper correction
BTC/USD
Bitcoin was sharply down in early Tuesday trading (losing over 6% in Asian / early European session) as soured sentiment sparked strong selling.
Fresh fall broke through key 90K support zone (floor of larger 90K/110K range) and generating strong bearish signal, with close below this zone to validate signal and open way for deeper correction, as bears also cracked pivotal Fibo support at 87801 (38.2% retracement of 52563/109582 rally.
Break of the range floor would also complete a double top pattern on daily chart and add to growing negative signals.
Technical pictures turn bearish (momentum indicator broke into negative territory / south-heading daily Tenkan/|Kijun-sen are diverging after creating a bear cross) and contributing to bearish outlook.
However, oversold conditions and today’s significant drop suggest that bears may take a breather for consolidation.
Broken 90K level turned into resistance which should ideally cap and maintain bearish stance for deeper drop and potential attack at 81200/81000 zone 200DMA / 50% retracement).
Res: 89038; 90000; 91759; 93292.
Sup: 86784; 85132; 81235; 81059.
Author
Slobodan Drvenica
Windsor Brokers
Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.
