Bitcoin dropped down to $8012 followed by the bulls buying the dip within the same hour. The hourly chart has been a rollercoaster for the past 6 hours with a war for the $8000 level.
Looking at the 4-hour chart, the bears attempted another break of the $8000 level a day ago and managed to drop Bitcoin down to $8005. The bulls were able to defend that level, setting a ‘higher low’ at $8012 or a double bottom. This is good news for the bulls and shows they still have strength over the short-term.
On the Daily chart, the bulls are looking to set a higher low compared to the recent bottom of $7710 but it’s worth noting that buyer volume continues to decrease significantly.
According to Josh Rager, Crypto Trader and Co-Founder of Blockroots, Bitcoin could be making its way down to $7600.
$BTC Daily Chart doesn’t look pretty
Bitcoin could be making it’s way down to $7600’s support with breakdown from here
Currently at support, eventually buyers can run out at this level
Buyer volume continues to decrease pic.twitter.com/E3n9cpY8Ha
— Josh Rager 📈 (@Josh_Rager) October 5, 2019
In his tweet, he explains how the decline in volume and the overall look of the daily chart point towards Bitcoin slipping down further.
The weekly chart is also not very pretty as the bear flag is clearly still in place and the bulls would need to gain significant momentum to break out of it. The EMAs have not crossed bearishly just yet which is a relief for the bulls.
A drop below $7733 would mean a break below the 12-period EMA on the monthly chart. This break would be significant and could help the bears in the longer term, however, it’s always important to remember that Bitcoin is in a monthly uptrend even after the recent drop.
A drop to $7600 or lower could end up as the perfect setting for a short squeeze as a fakeout is likely defending the 12-period monthly EMA support.
The daily trading volume of Bakkt has been declining significantly in the last few days with a low of just 28 contracts traded over the first 24 hours.