ABC correction: 3 important Bitcoin levels to watch for in this drop

04 Jun, 2019
by Lourens Pepler
Price Analysis
ABC correction: 3 important Bitcoin levels to watch for in this drop

Bitcoin has entered its bearish zone after breaking down from higher time frame momentum. Is this the dip that will take us to $6000, or will Bitcoin hold strong and stay near current levels? This is the BTC Price Analysis for June 4. 

Highlights:

- BTC entered bearish zone

- RSI trend broken on Daily

- ABC correction?

- 3 important levels to watch

On the daily we can see that Bitcoin ended up breaking below its daily momentum trend on RSI. This along with price being over extended for such a long period of time, we should assume bearishness to follow for BTC. In Monday's analysis we expected a sharp drop to come for BTC, after it made a double top on RSI. Although we already received a drop in price, RSI does not yet show any signs that it's done falling. Since we expect price to continue falling, we will look to TA to give us possible support zones.

BTC/USD chart provided by Tradingview

Going back to our 2017 example from yesterday, we can see after the double top formed on RSI that Bitcoin completed an ABC retracement, before continuing on with the Bullish trend.

BTC/USD chart provided by Tradingview

Plotting out the ABC correction on today's chart, in a similar way it formed in 2017, gives us an idea what we can expect for this dip. We can already see that we have formed the A and the B, and now on its way to complete C.

Possible support zones?
The first level of support we are able to spot is all the way down at $7000, although we do not feel this price will be strong enough to hold as support. The next stop for the dip would be $6500, which we think is the best bet. $6000 was a very strong magnet zone in 2018, so we should expect that it will be revisited, before the bull run continues. Lastly we have a very deep retracement level of $5600. A dip that far down should happen very fast and we won’t see price stay there for very long.

BTC/USD chart provided by Tradingview

As BTC continues to fall, some altcoins are providing good setups for possible gains. Do you think Alts will rise while BTC looks for support, or will alts take a tumble with Bitcoin? Let us know in the comments below!

Disclaimer: Keep in mind this not investment or trading advice, just the opinion of our analysts. As always, do your own research, make your own decisions.

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