Bitcoin Heads for the Support Again After Breaking the 100 Daily SMA
Cryptocurrencies turned really bullish in the Q2 of this year. BITCOIN surged during that quarter after consolidating between $3,000 and $4,000 in Q1, following the massive decline from last year. So, it seems like digital currencies are here to stay in the long term and are defying the traditional banking system.
Bitcoin reached $13,850 on my broker’s platform, but it hasn’t been able to make new highs since then. In fact, the highs have been getting lower and they have formed an ascending trend line. But at least the lows haven’t been getting lower. A support level has formed at $9,000, which means that Bitcoin has been trading in a triangle/wedge for several months.
Earlier this month, buyers had a go at the trend line, but it rejected the price, helped also by the 50 SMA (yellow) on the daily chart. The sellers tried to take situation in their hands after that, but the 100 SMA (green) prohibited them from doing so, as it provided support twice.
But yesterday the 100 SMA was finally broken to the downside, which means that the road for further downside action is open. The aim now is the support at $9,000 once again. We will see how the price reacts down there. If we see confirmation of a bullish reversal, we might go long on Bitcoin.
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