Bitcoin (BTC) has lost more than 16% of its value since September 13. The cryptosphere is in the red, despite the success of the Merge. For the mother of cryptos, this drop leads her to a critical support zone. This is the lowest of the range since June, which sits around $18,800. Will it bounce back or drop below this level? Let’s try to find the answer in this graphical analysis.
The crypto market in the red
In the space of a week, the total market capitalization of cryptocurrencies suffers a drop of 11.46%. Many digital assets are showing bearish patterns on their charts. Like Ethereum, which recently broke the rising wedge downwards.
This decline also leads bitcoin (BTC) towards the support which is found around $18,800. Not to mention that this is also the lowest of the range that has formed since June.
For followers of chart patterns, this drop is only a logical continuation of the ETE pattern visible in daily on BTC. But not only that, there is also the breakout of the rising wedge.
Thus, all these figures seem to be in favor of a decline in the price of bitcoin. If the sellers continue to dominate, the price of this crypto should reach $17,700, or even drop below. However, there seems to be hope for the bulls: a hammer has formed on the support zone.
Bitcoin (BTC): a “hammer” on the support zone?
Indeed, a reversal figure called “hammerformed near bitcoin’s support zone. This figure can be seen by putting the BTC chart on a daily scale. This is a very recurring candle shape, depicted as a hammer, as its name suggests.
Very popular with the trading community, this figure means that the buyers are starting to gain strength. On top of that, it sits on bitcoin’s $18,800 support. For a technical trader, this increases the likelihood that BTC price will bounce off support. Thus, he can consider opening a long position based on these two parameters.
If the price of bitcoin breaks the range down, it is very likely that its value will drop below $17,700. But for now, the hammer on support seems to be rekindling bulls’ optimism.
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