A prominent analyst fears difficulty for if its spot rate drops below $7,500.
, the chief information officer at US-based Redacted Capital, said holding the $7,500-level is essential for as this Thursday. The analyst noted that falling below $7,500 could switch the interim market bias in favors of bears, as shown in the chart below.
Price Breaks Below Interim Ascending Trend Line | Image Credits: Nick Cote
Cote showed breaking below a crucial ascending trendline and forming lower lows towards $7,836.23. The price action flipped the then-current range support – defined by $8,210-8,246 – to resistance and brought new support targets in sight. One of these supports is at $7,500, a level which served as strong resistance to ’s multiple upside attempts during May 12-13 session. The same level turned support after the price closed above it on May 13 between 1500-1600 UTC.
Six hours after Cote predicted a “deeper dip towards $7,500,” the price formed a fresh lower low towards $7,748.72.
“So far so good,” said Cote. “Bounced into the throwback, bearish price action confirmed. Now let’s see if we can get the lower level tag. Holding at 7,500 would indicate more life, but below, yikes.”
So far so good. Bounced into the throwback, bearish price action confirmed. Now let’s see if we can get the lower level tag.
Holding at 7,500 would indicate more life, but below, yikes.— Nick Cote (@mBTCPizpie)
What’s Below $7,500
Cote expected the price to continue its drop towards $6,700 if it drops below $7,500. The analyst did not explain why he chose $6,700 as his downside target. However, a more in-depth look at his chart spilled the secret out.
NewsBTC found that Cote was taking his cues from the price action from May 13. The session on the day tested $7,500ish range on four consecutive occasions. The resistance area rejected those upside attempts and eventually woke the bears. The result was the formation of nine red candles posting more than 10-percent in losses ahead of the session close, as shown in the recreated chart below.
Testing $6,700 as Bear Target | Image Credits: TradingView.com
The only thing standing between $7,500 and $6,700 now was a red curve which was not there during the May 13 session. This 200-hourly moving average could offer generous support to a possible, extended downside action, much like how the 50-hourly moving average (the blue curve) capped the ’s May uptrend. Breaking below the 200H MA was also a signal of intense selling action which, as Cote predicted, could quickly test the $6,700-target – or beyond.
Bulls’ Take, Meanwhile
The price at press time is testing $7,752 as range support, another support level with a decent history. At the same time, the ’s hourly (RSI) is oversold, waiting for an upside correction.
A combination of these technical factors could influence to surge higher on an hourly basis. Meanwhile, a falling trendline in violet above would serve as a barrier to claim a stronger bullish bias. So, if stays below it, Cote’s prediction would remain relevant. If not, the would likely attempt to close above its 2019 high to continue its ongoing bull run.
Published at Thu, 16 May 2019 15:05:32 +0000
