Flash Alert: Tuesday 24th September
Bitcoin has continued its descent today, with BTCUSDT seen slipping all the way back to $9,604 during the Asian trading session before quickly seeing buying activity return to provide a lift to $9,794.99.
But momentum fizzled quickly at those levels as bearish bias prevailed. At the time of writing BTCUSDT was trading at $9,717.
Given the magnitude of recent declines, we wouldn’t be surprised to see Bitcoin stage a temporary recovery to $9,800 ( the 7-period exponential moving average on the 4-hourly charts) and quite possibly $9,952 (the 7-day exponential moving average) within the next 24 hours.
Traders will be eager to see whether any potential bounce towards the short term moving averages will be met with renewed selling pressure.
But if experience has taught us anything, its to never try to catch a falling knife.
Sentiment is increasingly becoming bearish and we believe the overall trend remains skewed to downside, especially given the price action we’re seeing at the moment. Any bounce, if any, is very likely to be short lived.
Our current base case scenario is for Bitcoin to continue drifting lower towards the $9,400 level over the next week, which is the floor of the current descending triangle formation (or descending wedge, depending on how you draw your lines on the voodoo candlesticks). At those levels we will be closely evaluating buying activity to understand whether Bitcoin is well supported.
Failing to find support at $9,400 will see Bitcoin slip further to the $9,000 mark, a level that coincides with its 99-day simple moving average.
Anyone interested in reading our previous Flash Alerts may do so here as they continue to remain valid and provide a good trail for anyone wanting to catch up with recent price action.
A follow up post to this Flash Alert may be found here.
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