Price Action History
First, let’s talk about the Big Picture. Bitcoin had a massive rally from $20K to $65K. That rally went from Mid December 2020 to mid April 2021, took about 120 Days, suffered three major pullbacks and totaled 226% gains from $20K.
After the big rise, we had a fall. This fall was larger than the proposed 50% drop to enable buyers a “free position”. The fall had a peak drop of 55% or $36,099 from the ATH but it lasted longer than the time of the peak drop. The total length of the drop was 98 Days.
On July 20th, 2021, Bitcoin began yet another rally. This rally would go from $29,301 to exactly $69K and would last for 114 Days. This produced a percent gain of 135%. The rally reached its current ATH on November 10th, 2021.
After the ATH, Bitcoin has been in a fairly steady death spiral. This Chop and Drop – Chop and Drop has been going on now for 71 Days and the peak drop so far has been a 42% loss from the ATH. This only brought Bitcoin down to $39,650. A 50% move down would bring Bitcoin down to $34,500.
The Levels of Importance
Now that we have a proper understanding of the price action over the year or so, we can start to lay out the areas of Support and Resistance that should matter the most.
We start with the Downward Sloping Channel and for obvious reasons. We have been bound by this channel for over two months. There is no escaping the fact that the daily trend is indeed Down. There is little to be Bullish about until Bitcoin can Break out of the channel to the high side. This channel is also dynamic, meaning that every day both the Support and the Resistance will change values.
The Support are we are on is 3-fold. First, we have the Horizontal Zone between $40,600 – $42,000. Second, we are on the second test locally of the upward sloping trendline that dates back to the original rally that broker $20K and third, we are at a structure low and potential double bottom. We will have a fourth area of support if Bitcoin is able to breakout of the channel in the next few days.
If Support is to fail then we look to $34,500 as the 50% drop from the ATH and the opportunity for a “free position.” Underneath that level we look to another really good area of Support and that area is $30K, which is the area the first rally found Support from before making a new ATH.
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