The Fibonacci Retracement indicator suggests that $5,300 is the main short-term trend level for Bitcoin
The Fibonacci Retracement indicator shows $ 5,300 as the leading short-term trend of Bitcoin. And when Bitcoin retests the significant Fibonacci levels, it is highly likely that the price of Bitcoin will decline.
Why is $ 5,300 so important for Bitcoin in the short term?
When using the Fibonacci Retracement indicator, technical upgrading considers 23.6%, 38.2%, 61.8%, and 78.6% as key near-term levels that are most important. As an example, if the price of an asset drops by 23.6%, it would make it a 0.236 Fibonacci level.
Typically, the 0.618 Fibonacci level, aka the “Golden Ratio of 0.618”, is an outstanding short-term support. This level is also used in other mathematical applications such as galaxy formations and architecture.
According to analyst Crypto Birb, shortly, Bitcoin may retest the low of $ 5,000 before another rally.
BTC USD 4-hour chart with a 0.618 Fibonacci level | Source: Crypto Birb
Previously, Bitcoin seemed to gravitate towards significant Fibonacci levels multiple times in a short period. Such retracements happen because, as an emerging asset, BTC often sees extreme volatility swings.
When Bitcoin sees a significant pullback, as seen in the drop to $ 3,600 on March 12, it registering to respond with a V-shape recovery. However, this often leaves BTC vulnerable in no small pullback, which elevates the risk of retesting key areas like Fibonacci’s 0.618 level.
BTC USD 1-week chart shows retest of 0.618 level many times since 2018 | Source: Tradingview
BTC price adjustment scenario in the short term
Bitcoin price declined $ 7,150 on April 13, and analysts foresaw two scenarios for Bitcoin shortly. The BTC price may rise to around $ 7,300 to $ 7,700, rejecting the so-called “distribution point” and making its way towards lower support levels.
The bullish scenario is that it declares $ 7,300 as a support level, consolidates around it, and sees a rally above $ 7,900 next week.
$BTC – Path to daily supply? pic.twitter.com/szvLrTXL9Q
— CJ (@IrnCrypt) April 12, 2020
XBT USD 4-hour chart with bull and bear scenarios. Source: CJ Twitter
The recent rise in BTC has been aided by a significant increase in volume, while previous rallies are lacking in volume enough to push it forward to massive resistance. However, in the medium term, traders are still very confident that $ 3,600 is the lowest for 2020. The price could consolidate in the $4,000 to $5,000 range but is unlikely to go to the $3,000s again.
Prominent cryptocurrency trader known as Loma:
And there she goes. The Jesus candle.
Dodged another bullet. Got long on the break above $7,000.
Not sure how much juice we have left here but $7,700 area is on the table now. This kind of PA makes me pretty confident we’ve bottomed for the year. pic.twitter.com/7Y7vTZQ9Hn
— Loma (@LomahCrypto) April 12, 2020
Whether Bitcoin will see an accumulation phase as low as $ 5,000 and see no further decline in the area between $ 4,000 is still visible.
Read more:
- Bitcoin Miners Now Seek To Acquire As Many Coins As Possible Before May’s Block Reward Halving
- The Close Above $ 7.000 Comes As Bitcoin Holds A Key Technical Level That Could Be Poised For Significant Upside Movement