Bitcoin has been bouncing all over the show in the past couple of weeks, but many people have been stunned by the latest dip.
Over the weekend, Bitcoin fell from $11,100 down to $10,390 and it’s still sinking, but was this to be expected?
Potential for $9,000 Level on the Cards
Last week we correctly predicted that Bitcoin will rise to around $11,100, but instead of being able to hang on and find a support level, it fell prey to a descending channel.
By failing to make it to $11,200 after ploughing into heavy resistance, sending it into free fall similar to when it fell through the support at that level back on September 3.
Bitcoin has now found another support level at $10,430, but it ends at $10,360, meaning f Bitcoin drops through that lower level, then Bitcoin will tank hard.
If the support level breaks and Bitcoin does tank, Bitcoin will slide all the way back down to the mid $9,000 level, potentially dipping as low as $9,200.
Rising into Trouble
Bitcoin has in fact been in this new descending channel since it broke the $11,000 level back in July.
Since then. It has tested the top of the channel twice, once at $12,486 and a second time at $12,090.
At the bottom of the channel, Bitcoin has tried to test this level several times, finding some support to remain in the channel.
Bitcoin is currently sat in the middle of the channel, meaning that we could potentially see another push for the top.
However, this is unlikely to be the case and we will most likely see it break through the support and plummet down towards the mid $9,000 level.
This channel has been here for some time now and it’s showing no sign of going away, so prepare for a long-term gradual drop down.
Can We Escape?
Fortunately, descending channels aren’t like jail, they’re just ranges that Bitcoin will trade it – all part and parcel for its lifecycle.
If we can see two closes out of the channel on the top end or the bottom end, we can safely assume that the ride is over.
If we close on the top end, then Bitcoin will likely begin a meteoric rise back towards its ATH level and fulfill our prediction of $19,000 by January 2021.
However, if it closes on the bottom end and the bulls fail to buy up in bulk, then we could see Bitcoin fall out of $9,000 and touch the $8,000 range.
This would be catastrophic for long-term goals, and would cause massive panic selling.
On the bright side, Bitcoin at this crazy cheap price would be too good to pass up, meaning we can all fill our boots with the cheapest Bitcoin the second half of 2020 has given us.
There’s a positive to every negative action, so if Bitcoin does sink down lower, it just means that there’s a better buy-in price for Bitcoin and this means bigger profits when the next ATH hits!