Bitcoin’s drop below $3500 yesterday was part of a sharp drop throughout the crypto market that may have had something to do with news about artificial price pumping in large altcoin Tron, however from a technical standpoint a fast drop for Bitcoin was also anticipated on any drop below the strong support built at $3500.
A strong bearish move like those we saw throughout 2018 would have Bitcoin quickly crashing down to the next support level at $3000 (2018 lows) but so far that has not happened which is a bullish sign. In addition, the sharp drop was during weekend trading when price can have wide price swings that usually recover during weekday trading hours.
In fact, so far today price has recovered for BTC and most large altcoins quite nicely and volume looks solid as well. This creates a SAFE trading opportunity. Not a guaranteed profit opportunity as these set ups failed for most of 2018 ? on the other hand they have been working pretty darn well so far over the last month so the set up does offer a trading edge.
We also took a look at some of the stronger midsize altcoins like FCT (chart shown below) and didn?t see the same strength as BTC, so, for now, the trading opportunity seems to be in BTC and larger altcoins ? that?s important for various reasons that we?ll be watching and updating closely in the coming days.
However, because price is now struggling with the key $3500 level the next move for Bitcoin is likely to be important as there is little support all the way down to 2018 lows at $3000, and much lower prices come into play if price breaks $3000. On the other hand, a strong close today with solid volume would be considered a successful retest of key support and is likely to encourage buyers to come in the market and could lead to test higher resistance levels at $4000 and above that the 2018 trend line currently around $4500.
NOTE: LTC was very bullish recently but chart is not shown as volume is not showing the same relative strength as BTC ETH and EOS ? that could easily change by close today if LTC so we?re watching LTC as well.
