Bitcoin Retraces in a Flash Before Recovering Slightly

By:

Published: Dec 13, 2023, 08:04 GMT+00:00

The reason for the drastic sell-off is unknown, but I suspect it has to do with traders using highly leveraged positions, which tends to happen when the market has a continued bullish streak and traders gain unwarranted confidence.

Bitcoin’s Volatile Roller Coaster: A Recap of the Recent Price Swings

Bitcoin had its first real price decline in nearly three weeks, and while not fully formed, the weekly candle nearly erased all of last week’s gains at its low of $40,181. On December 10^th BTC exhibited a flash crash followed by a partial recovery. On the night of December 10^th (December 11^th in Australia) Between 9:00 and 9:30 PM EST, Bitcoin was trading at $43,219 at the start of the hour and quickly descended to $40,650 before swiftly recovering to above $42,200 only 30 minutes later. Bitcoin would go on to make a more gradual descent, eventually posting a lower low and a recovery to a lower high, currently Bitcoin is trading at around $41,200.

The reason for the drastic sell-off is unknown, but I suspect it has to do with traders using highly leveraged positions, which tends to happen when the market has a continued bullish streak and traders gain unwarranted confidence.

Technical Analysis for Bitcoin

The pullback in Bitcoin was shallow and did not cause any chart damage to the flagship cryptocurrency. Today’s candlestick is in the form of a doji which can represent either consolidation or a trend reversal. Today’s low matched up with 20-day exponential moving average, with BTC still trading above this EMA along with all the major moving averages one could make a claim that BTC is still in a bullish mode.

Contrary to that is the MACD which suggesting a change in direction from upwards to downwards with today’s crossing of the signal line above the MACD line. This hints at a change of control switching from bulls to bears, the last time the signal line was above the MACD line was on December 1^st.

BTC MACD on daily chart

Resistance is at $44,000 which matches up with the 38.2% Fibonacci retracement from the lows of March 2020 to the ATH reached in November 2021. Support resides just above $40,000 and below that at $38,000.

BTC weekly chart

For anyone interested in trading Bitcoin simply click this link to check out our dedicated service.

About the Author

Joseph M. Wagner IIcontributor

Joseph m. Wagner II has been studying technical analysis for eight years. He is a producer and video editor at thegoldforecast.com. His primary focus has recently been bitcoin and cryptocurrencies. He writes a daily blog for the gold forecast titled “Bbitcoin Fundamentals.”