If we’re going into a bull cycle, then the question of whether to BTD (Buy The Dip) needs to be asked. Is the drop in Cryptos from last Friday just one of many first time dips preceding an expansion? Or is it a continuation lower?
Let’s look at the support structure within the 6300 to 6400 price zones:
- This is the upward trend line from the swing low of 900 on April 15th, 2017 to the higher swing low of 2043.94 on July 16th, 2017.
- The next upward trend line is from the June 29th, 2018 swing low of 5790.01 to the higher swing low of 5900 on August 14th, 2018.
- And finally, from that August 14th low we have another uptrend line to September 8th, 2018 at 6116.
- There’s a double convergence of Fibonacci levels at 6350 from the current swing (0.236 Fibonacci level) to the prior swing (0.618 Fibonacci level).
- 6301.94 is the 4/8th Inner Harmonic – extremely difficult to cross above or below.
- 5977.28 is the 1.618 Fibonacci level from the recent swing, right on top of the #2 trendline – if prices were to get to here, expect a violent bounce.
What if these levels don’t hold?
Then we’ve got ourselves a swift move to the 4250 price level, it is the next highest volume node on Bitcoin’s chart. The good news is the pain would be very fast: there’s almost nothing between 6000 and 4200. Keep mind, that this level is also one of many extended Fibonacci levels. Tons of 1.618, 2.618, 3.618 and 4.618 Fibonacci levels converge on that zone. It would be a pretty epic bounce.