Bitcoin Drops Through Key Technical Support Level, Eyes 38.2% Retracement

Bitcoin Drops Through Key Technical Support Level, Eyes 38.2% Retracement
Andrew Rummer

over 2 years ago1 min

After hitting a fresh all-time high last week, bitcoin has slipped through a key technical support level and is heading for a sixth straight day of losses.

As the chart above shows, bitcoin spent much of Wednesday and Thursday trading in a tight range around its 50-day moving average (in pink) as bulls and bears battled to control the narrative. That support level has now failed, leading to accelerated losses. The token is trading at $56,700 as of 6:15am New York time on Friday after T3’s Bitvol index – a measure of bitcoin volatility inferred from pricing in the options market – hit a one-month high. 

Whenever a support level breaks, technical analysts will study their charts to find the next lowest level where traders are likely to step in with buying support. 

In this case, a quick look at the Fibonacci retracement chart (shown below) suggests we should find support around $53,648, the 38.2% retracement of the rally that began in June and ended last week. That’s 5% below bitcoin’s current price. 

Bitcoin retracement chart
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