Recall that Bitcoin moved higher with stocks on Wednesday, pushing back above $79,146 and into the old swing area that extends to $81,930. The move gave buyers a shot at taking back more control. To do that, they needed to get through the top of the area and stay above it. The rally stalled within the zone, and the price has since fallen back below $79,146.
Thursday. The risk-off crowd takes over
With the Nasdaq and chip stocks under pressure, Bitcoin has given back the rebound and moved back below its 100-day moving average at $76,950. The price was near $76,600 in the chart snapshot after testing the upper edge of the $74,925–$76,052 swing area. The 38.2% retracement of the summer rally comes in at $76,052, making that level the first downside barometer.
What next? The swing floor is the bigger test
For sellers, the 100-day MA at $76,950 is the close risk level. Stay below it, and the sellers keep the short-term advantage. Get below $76,052 and stay below, and the focus shifts to the swing-area floor at $74,925. A sustained break of that floor would open the door toward the 200-day MA at $73,195 and then the 50% retracement at $72,554.
For buyers, the first job is to hold the swing area and get back above $76,950. If they can get above that moving average and stay above it, the 100- and 200-hour MAs at $78,152 and $78,373 are the next targets. Above those, $79,146 comes back into focus.
In the video above, I talk about the technicals in more detail and explain the bias, the risks and targets.
Education. How to lean against a swing area
A swing area gives traders a range where price has repeatedly changed direction. Here, $76,052 is the first level buyers can lean against, while $74,925 is the floor that defines the broader support area. If price breaks below $76,052 and quickly gets back above it, sellers who chased the break may have to cover. Getting above the 100 day MA would be a risk and bias defining confirmation level that if broken, would give buyers more confidence. If price stays below $76,052, the lower end of the range becomes the next test. That distinction lets traders define their risk before they enter and judge the trade by what price does at the level.
This article was written by Greg Michalowski at investinglive.com.