Bitcoin Crossroads Made Clear By Two Remaining Lines in The Sand

Tony "The Bull" Severino

1 year ago

3 mins read

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After such a strong break of $10,000 and surge to above $12,000, Bitcoin investors are shocked to be back again at the key level rather than onward to more new highs. But with $10,000 acting as such strong resistance for so long, the market may be retesting this critical zone to confirm it as support.

At the same time, Bitcoin is retesting downtrend resistance as support and was rejected from a multi-year trend line, now acting as resistance. With the cryptocurrency at such a crossroads, what does passing beyond any of the clear lines drawn in the sand mean for the trend ahead?

Bitcoin Bullish Retest Searches For Triangle Support At $10,000

Support and resistance levels can be horizontal, or diagonal. Oddly enough, price action reaching pivotal horizontal zones also tend to do so when a trend line acts as a target.

For one reason or another, orders cluster in these areas. Rounded numbers like $10,000 can also act as psychological resistance, just due to its importance over the last several years of price action.

$10,000 is also 50% of the cryptocurrency’s peak price from 2017. Significant support and resistance lies at this important Fibonacci level, mathematically.

BTCUSD Weekly Downtrend Resistance Bullish Retest | Source: TradingView

It coincidentally lines up perfectly with former downtrend resistance once acting as the top of Bitcoin’s multi-year symmetrical triangle that it has since broken out of. A fall to confirm this line, is extremely bullish, but only if it holds.

However, coinciding with this bullish retest of downtrend resistance turned support, could have been a now-confirmed bearish retest of a multi-year trend line.

BTCUSD Weekly Multi-Year Support Line Bearish Retest | Source: TradingView

Bearish Retest Confirmed? Cryptocurrency Clearly At A Crossroads

Zooming out on weekly timeframes, the chart above shows Bitcoin price losing a five-year-long support trend line around Black Thursday.

As bullish as the rest of 2020’s price action may seem, could it have been nothing but a bearish retest of this critical trend line, supporting the entire last bull run, until now?

It is difficult to say, and trend lines are highly subjective and clearly meant to be broken. It is for this very reason why technical analysis is a never-ending practice with no definitive results.

Technical indicators on multiple timeframes are mixed. Monthly charts show Bitcoin barely entering a bull market, while weekly shows an ongoing bull run that is overheated and in need of a cooldown. Daily timeframes, however, show a market shaken by a violent over $2,000 drop in less than 48 hours.

Bitcoin fundamentals are weaker than they have been recently, but a sharp recovery in price could set things straight just as fast.

Clearly, Bitcoin is at a crossroads, and its chart reflects this. Adding both bullish and bearish trendlines together shows at what a crossroads the asset truly is at.

BTCUSD Cryptocurrency Crossroads and Cycles Compared | Source: TradingView

Does it get back over the support line it previously lost, and resume a massive secular bull market? Or was this the bearish retest and Bitcoin will soon fall into its first real bear market where monthly indicators properly reflect the panic and despair of the market.

If Bitcoin can hold here, however, and fully recover, it may not need to reclaim the old support line. It very well could be building a new one, so long as it doesn’t fall back below the downtrend line, all should be safe for the world of crypto.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

Tony is also celebrated for his literary contributions to the field. He is the author of the highest-rated Crypto Trading Journal on Amazon.com, a testament to his ability to communicate complex trading concepts in an accessible manner. This journal is widely regarded as an essential tool for traders aiming to track their progress and refine their strategies.

Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.

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