[Disclaimer: I am not a financial advisor, this is not financial advice, do your own research. I am personally just starting to learn technical indicators and these posts should not be taken more than the musings of a newbie]
So I've been following the price movement of BTC for the better part of a day so far - what has it looked like?
...yikes. Let's break it down.
The Catalyst: Head/Shoulders or Right-Angle Broadening Pattern
In the late hours last night and into the morning, we see something - relatively stable lows, and slightly higher highs. This is an indicator of a right-angle broadening pattern, signalling that perhaps we may be in for a downturn.
It could also be a head/shoulders pattern, although we do not see significant volume coming in from the "left" shoulder (the peak where the first angle line is drawn).
The volume was definitely not impressive enough to be a strong signal, but breaking the horizontal line at $55163, to me, was a sign that Bitcoin was on its way down.
Blasting Through the Floor
Bitcoin continued its downward journey throughout the day, stopping for a brief uptick midway through. The unsettling part comes a couple hours ago as the price blew past its previous support at $51147. Not a great look and not even stopping for some resistance before continuing its downward momentum.
There are a couple of possibilities, especially since we're seeing some movement on the upside at the time of writing.
1. Bitcoin climbs back to the previously-broken support of $51147 or hugs close to that level (new support/resistance)
2. Bitcoin continues its downward momentum until ~$46585. At that point, another old support will be tested as Bitcoin hovered around that region for 2-3 days before making its way up into the low $50000 mark.
I'm expecting #2, as there are no clear indications so far that there is significant buying power coming in to ward off short-sellers and retail sellers who are likely shocked by the sudden drop.
Perhaps we may be seeing the end of the crypto bull-run, or maybe it's an opportunity to purchase crypto at a discount? Only time will tell.