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Bitcoin (BTC/USD) Slides Below $6000 with $5600 and $5060 in Sight

Recently, we noted that Bitcion was in danger of breaking below $6000 and this break materialized during the 6/24 session. We had anticipated resistance around $7000, but price didn't even make it back up there before sellers pushed Bitcoin back down. 

Bitcoin (BTC/USD) Daily Chart

(click to enlarge)

Support Below:

  • The crypto market has been in correction mode throughout 2018 and the new low today is evidence that this mode still grips the market.
  • However we see some reasons to anticipate a support in the $5060 - $5600 area. This is a big zone (10% range), and is a key support/resistance pivot area. 
  • With the RSI in oversold territory, we can anticipate support as price approaches $5500. 
  • If the bitcoin market continues to capitulate and breaks below the $5000 mark, the next critical level will be the key support/resistance pivot at $3000.

Resistance:

  • At this point, we can start to expect resistance first around $6000, and then around $6400. 
  • A break above $6800 will be needed to revive any bullish outlook even for just the short-term. 

Nothing like a 75% drawdown from the top, but I believe this is time traders should have dry powder for this dip. You start hearing about the demise of bitcoin, and if you genuinely believe in bitcoin's value proposition as a store of value and maybe medium of exchange, the contrarian play is appropriate. If you do, you must accept the volatility and be prepared for a long correction market before the next bull run.

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