Yesterday we looked at a possible ABC correction scenario in bitcoin after price failed to reach back to last week’s highs near 300. During the 3/18 session, this ABC correction materialized, but wave C extended further than the length of wave A. Furthermore, the decline was sharp, so even after C reached equality with A, there was no real support and bitcoin fell to about 250 to start the 3/19 session.
Because of the sharp decline, we should be cautious with the bullish outlook. With the 1H and 4H RSI in oversold conditions, and with the medium-term outlook neutral-bullish, we should expect a rebound, but let’s limit it first to the near-term time-frame. When we look at the 4H chart, we can see that if price rallies back to the 265-270 area, bitcoin would be testing a previous support/resistance area. If the RSI comes back to 60 in the 1H chart and stalls while price also stalls in the 265-270 area, we should expect another bearish attempt.
In the 4H chart we can see that if the current dip does indeed extend after a near-term correction or consolidation, the next key support will be in the 210-220, February lows. From there, we should expect some short-term bullish attempt. In the current technical environment, we should keep our outlooks in the short-term. A break below 210 however, will expose the 2015-low around 167. Otherwise, we should expect a short-term attempt to rally back to at least 250.
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