What is Bitcoin (BTC) Doing Right Now?
Bitcoin is currently trading below $42,000 and is looking extremely bearish at the moment. BTC dropped from $45,000 to $41,000 in less than 8 hours and is now headed towards the $40,000 mark. The market is showing extreme volatility at the moment and Bitcoin could spike in either direction.
Right now we would not be trading Bitcoin in the short term and will wait for it to stabilize in the next day or so.
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Analyzing the Daily Timeframe
If we take a look at the 1 day timeframe we can see that the bias for Bitcoin is on the downside. Bitcoin was moving nicely towards the $45,000 mark and faced a massive rejection there. The rejection at the $45,000 level has not just triggered another sell-off but it also means that we might be forming another lower high on the daily timeframe.
This indicates that we are repeating the same pattern we saw during the May sell-off. If it plays out in the same manner we could be heading towards $36,000 once again.
Also, if we take a look at the Fibonacci retracement from local high to previous low, we can see that the price has faced rejection at a crucial level.
We can see that the price fell as soon as it touched the 0.5 level ($45,000) and found support at the 0.23 level ($40,900). We are retesting the 0.23 level for the second time and could break below further if the bulls do not step in.
Conclusion: Where is Bitcoin (BTC) Headed Next?
Bitcoin is currently looking extremely volatile and could go either way in the short term. We would not be trading BTC in the short term until it stabilizes in the coming days. If Bitcoin fails to hold the $40,000 level, we could experience another sell-off towards the $36,000 – $37,000 level.
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