Bart Simpson is back. The chart of Bitcoin (BTC) resembles the hair of the titular “The Simpsons” after it shed $500 within minutes, losing the support of the $11,800 level.
After tapping $11,200 — or even $11,100 on some exchanges — Bitcoin has somewhat stabilized, returning to $11,400.
This dramatic sell-off caught many traders with their pants down, as some were expecting the cryptocurrency market to continue its move higher. But alas, this wasn’t the case, as made evident by the chart below.
Despite the clear loss of the $11,800 support level, which has acted as a pivot point for both bulls and bears over recent weeks, there are some keeping their heads up high.
Analyst BigChonis recently made it clear that until Bitcoin closes a six-hour candle under $11,000, bulls should have no worries. Indeed, as he outlined below, that level could be “make or break” for BTC in the near future.
Also, technicals still seem to suggest a bullish trend, at least in the short term. The MACD indicator, which tracks trends, is still trending green. The last time the indicator’s histogram crossed from red to green, two strong moves higher followed: 51% and 62%. Should history continue, Bitcoin could hit $17,000 by the end of the month.
Bears seem to have a better case though. Analyst Crypto Warrior recently pointed out that BTC’s chart is currently following the trends observed by Richard Wyckoff, a prominent historical figure in the stock charting and technical analysis space. If Bitcoin is to follow Wyckoff’s observed trends, what may follow is a short relief rally, then a collapse back down to $10,000 in a so-called “markdown phase”.
That’s not all. Crypto Michael recently wrote that this flash crash saw Bitcoin break down from a key symmetrical triangle pattern on a number of short-term time frames. Also, BTC was rejected from the 0.35 to 0.382 Fibonacci Retracement region, which is a technical move that could result in further pain for Bitcoin holders and bulls.
And to put an unfortunate candle on the proverbial Bitcoin cake, this move marks yet another lower high on “higher time frames”, suggesting that bulls continue to underperform and are losing grip of the cryptocurrency market.