08-29-2019 icon

Bitcoin Drops below $10,000 Support: Here Are 3 Possible Outcomes

By Sagetwriter

After hovering around the $10,000 price region for more than a week, Bitcoin (BTC) dipped by $600 in under 30 minutes to now trade around the $9,500 region at the time of publication.

This sharp decline comes as little surprise; analysts had predicted a slight dip prior to Bakkt’s September 23 launch, as many maintain a bullish sentiment for short term price rally.

Over the weeks, BTC has repeatedly tested the 200-twelve hour moving average (MA), forming a series of higher lows. Bitcoin finally broke below leading to a 7% drop within minutes.

Given the current market conditions, a look at the current BTC/USD chart indicates three possible movements from this point: a bull flag, a symmetrical triangle, or a descending triangle.

Bull Flag Formation

Bitcoin could continue its trajectory within a descending parallel channel, a part of a major bull flag which has been forming on the charts since mid-June. This movement will look to continue the same pattern which saw BTC move upward 84.50%  between June 10 – June 26.

Should this bullish formation hold, BTC could move in same direction as the previous bull run, with predictions set at a 45.80% price increase from the breakout point.

At this time, BTC seems to be testing the support and should it fall below this area, sell offs are likely to set in. However if it holds above support, a rebound and breakout to the top is expected.

In this situation, BTC could go up 23.6% to trade at 11,300, with more bullish movement to as high of $15,600.

Symmetrical Triangle

Another likely scenario could be BTC breaking down out of a symmetrical triangle. This indicates a period of consolidation before price moves bullish or bearish.

Taking this into consideration, a move above the upper trend-line will kick off a new bullish trend, just as a move below the lower trend-line will  signify a bearish trend.  Likely price levels in this region $9, 765 to $7,451; while a move above the Fibonacci retracement area could push BTC to around $14,650 price.

Descending Triangle

In the event that the above scenarios do not play out, a descending triangle could be formed. This is also viewed as a bearish indicator showing that the demand for BTC is weakening.

A break below the lower support is likely to continue a bearish movement of about 30% dip. However if Bitcoin breaks to the upper side, $12,770 is a possible target.

In all, a look at the BTC/USD 1-Day chart indicates that all three patterns are possible; there is no clear indication on the next likely direction. Whichever scenario that plays out will determine where BTC is headed next, analysts advice a wait for a breakout or breakdown of the 23.6 or 38.2  Fibonacci retracement area before buying.