A lot has happened since the start of the month as Bitcoin plummeted by almost 17% to a five-month low. It saw a slight bounce last weekend but the price is back in a downward range. Bearish actions may continue. 

Following a small recovery to the $53,800 area on the first day of this month, Bitcoin initiated a drop and extended bearishness below a long-rising trendline that served as diagonal support since March. It is now acting as resistance on the daily timeframe.

During the extension, the $56,552 level that stood as parallel support since May also collapsed and the leading cryptocurrency fell to a multi-month low of $53,486 last Friday, causing more pain in the market.

A rejection occurred and the price retraced in the following day to retest last month’s cracked support as resistance. The price fell back yesterday and slipped near the multi-month low in the past hours.

Adjusting to the 4-hour chart, BTC seemed to have found support again and is now forming a double-bottom pattern. This pattern looks more like a trap as it may sustain selling pressure any moment from now.

But if the bullish pattern plays out, we may see an increase towards the rising trendline as a retest before falling back. Climbing back above this trendline could leur the bulls back.

In the latest fall, Bitcoin is currently supported by the $53,486 level. If the price breaks below it, the next area of interest for selling would be the $51,550 and $50,520 supports – marked as a pullback level in February. 

For a potential reversal, there’s an immediate resistance at $56,552. If the price climbs above it, the $58,402 and $60,200 levels to watch on the way up.

Key Resistance Levels: $56,552, $58,402, $60,200

Key Support Levels: $53,486, $51,550, $50,520

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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Image Source: tzido/123RF // Image Effects by Colorcinch

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