Calm has settled in the crypto market following a turbulent weekend for Silvergate. After suffering a significant decline on Friday, bitcoin (BTC) is currently bumping up against key support.
Bitcoin (BTC) on critical support
The bearish wave that was about to hit the crypto market subsided after the weekend. Indeed, after falling more than 5% on Friday, most of the biggest cryptos saw no significant movement yesterday. For bitcoin (BTC), its price remains ranged around a key support. This is the lower part of a 3 month ascending channel. This pattern can be a reversal pattern if the price breaks down. Thus, the break of this support could initiate a descent below $20,000. Which seems highly likely.
Indeed, we see the presence of a descending channel on the RSI, in parallel with the ascending channel. So there is a divergence between the RSI and the price of BTC, which is a bearish signal. Thus, we can consider the break of this support down. But before that, bitcoin (BTC) could rally towards the middle right of the channel before starting a decline towards $20,000.
Likely scenarios this week
The markets are expecting two important events on the economic calendar this week. We should therefore expect a volatile week. For the moment, nothing is certain about the direction that bitcoin (BTC) will take. If the bearish impulse since Friday continues, we can envisage a week in the red. However, everything will depend on the price movement today.
A rise above $23,673 could be considered, if BTC makes the low for the week today. Indeed, we can see the presence of a mini-support on the $22,086 level. The price of bitcoin (BTC) could then take the sell stops that are below this level, before starting to rise again. If the price makes a high higher than the weekend high today, we can consider scenario 2. Given the situation of Silvergate, supported by the presence of an RSI divergence on the daily scale, the scenario 2 seems most likely. Thus, a short position would be the most appropriate.
How it works ?
Entry point: $23,437
Stop: $23,900
Goal 1: $21,368
Objective 2: $20,000
Receive a digest of news in the world of cryptocurrencies by subscribing to our new service of daily and weekly so you don’t miss any of the essential Tremplin.io!
