Bitcoin finds buyers near key technical support.
Bitcoin fell yesterday to its lowest level since August 20. In the process, the price broke below its 200 day moving average, currently at $73,117, but stopped short of the 50% midpoint of the move up from the July 1 low to the September high.
That midpoint comes in at $72,554. Yesterday’s low reached $72,677, leaving the sellers just $123 short of that key target.
The subsequent bounce suggests buyers were willing to lean against the support area, with risk defined by a break below. The price has since recovered above the 200 day moving average and currently trades near $73,706, little changed on the day.
So what next?
Buyers remain in play, but have work to do.
The recovery above the 200 day moving average gives buyers a short-term foothold. However, holding support is only the first step. They now need to extend the recovery through resistance.
The next key target is the swing area between $74,925 and $76,052. That area was defined by a number of swing highs and lows going back to August 20. On Sunday, the price broke below it with more downside momentum and has remained below since.
If buyers are to take back more control, they need to get and stay above that area. Doing so would open the door toward the 100 day moving average near $77,621.
Until then, the bounce remains a correction into an area that was once support and is now resistance.
Sellers need to break the downside support.
For sellers, the roadmap starts with a move back below the 200 day moving average at $73,117. That would weaken the recovery and shift attention back toward yesterday’s low at $72,677, followed by the more important 50% midpoint at $72,554.
A break below the midpoint with momentum would give sellers more control and open the door toward the natural support at $70,000. Below that, the 61.8% retracement comes in at $69,057.
Those are the downside targets if the support buyers lose their foothold.
The battle lines are defined.
Buyers leaning against support want to see the price hold above the 200 day moving average and build momentum toward $74,925–$76,052. A sustained break above that resistance area would strengthen their case for a larger recovery.
Sellers want to keep that resistance ceiling intact and push the price back below the 200 day moving average and the $72,554 midpoint.
Between those areas, the battle continues. Support has attracted buyers, but the sellers still have a resistance area to lean against.
In the video above…
In the video above, I outline the support that helped stall Bitcoin’s decline, explain why the $74,925–$76,052 swing area is the next key upside test, and walk through the levels that would give buyers or sellers more control.
Education: A support bounce needs follow-through.
A bounce near a key technical level gives traders a place to define and limit risk. It does not, by itself, confirm that the broader direction has changed.
The next test is how the price behaves at resistance. If buyers can break above former support and stay above it, they add credibility to the recovery. If the rally stalls there, sellers can lean against that same area and look for another rotation lower.
For Bitcoin, the support levels define the buyers’ risk. The $74,925–$76,052 resistance area tests whether they can turn a defensive bounce into a stronger recovery.
This article was written by Greg Michalowski at investinglive.com.