Many enthusiasts wonder why the Bitcoin price keeps dropping. Despite successfully surpassing $10,000 not that long ago, the momentum has soured significantly once again. 

Key Fib Keeps Getting Rejected

It is not difficult to see where this negative momentum is coming from. Over two weeks ago, the Bitcoin price surge was rejected at the 50% Fib level.  For those unfamiliar with trading cycles, an explanation is in order.

Most markets move according to certain thresholds, which can act as support or resistance. The Fibonacci retracement lines play a key role in this regard. They indicate key price levels at which a trend may fully break out, or completely reverse course. 

In an uptrend, core Fib levels include 38.2%, 50%, and 61.8%. These are often price levels near which massive volatility will ensure fairly quickly. It is certainly possible that an uptrend stalls near the 50% Fib and falls apart completely. 

When looking at the Bitcoin price chart above, the problem becomes apparent. A clear rejection near the 50% Fib has resulted in massive volatility. Attempts to move up again from that point forward have been rejected as well. Even the 38.2% Fib is not a support level right now, as it cannot be sustained. 

It's not all Downhill by Definition

One interesting thing to keep in mind is the overall market trend. Although the 50% Fib is rejected, the 38.2% Fib is holding itself relatively well. Defining it as an actual support is impossible, but it appears as if traders don't want to go below it, for now.

A bounce between a 50% Fib and 38.2% Fib is completely normal. Such momentum has occurred several times over. It is the third time this range will come into play in recent years. That shows the current downtrend may be bottoming out again fairly soon.

It is also worth noting that, on a bigger scale, the Bitcoin price has jumped from the 23.6% Fib to the 50% fib in quick succession. Some pushback near the 38.2% is perfectly acceptable in this context. 

Eventually, the Bitcoin price will try to push for the 50% fib near $11,620 again. How long this process will take, remains to be seen. It can be a matter of days, weeks, or even months.  As long as the 38.2% Fib holds near $9,530, the uptrend remains in effect.