BTC's Plunge May Continue Unless It Can Hold 19,225
Updated
BTCUSD BTCUSD New Low June 18, 2022
After plunging to a new low for the year on June 18, 2022, BTC rallied hard, climbing about 24.25% from those lows. BTC began rolling over again at 21,868, unable to reclaim its 22,000 price level, which is currently where the 21-day EMA lies.
Corrective Bounce off June 18, 2022 Low
Despite being a 24.25% rally, BTC had become so extended to the downside that the bounce appears weak from a technical perspective. BTC was unable to decisively reclaim its shorter-term EMAs on the daily chart, such as the 8 EMA (yellow line in the chart below). Also notice on the daily chart below that BTC price has been unable to recover anywhere near its upper Bollinger Band, remaining below the 50% level on %B indicator (shown as the lowest subgraph at the bottom of the chart below)
Technical Reasons for Further Downside
The chart shown above is a 130m chart, which offers a good balance between shorter-term intraday and daily charts. After spending a while piercing and walking the lower Bollinger Band on this timeframe above, BTC bounced off its June 18 low and pierced the upper band. But the candle that pierced the upper band has a very long upper shadow, showing bearish supply / resistance, which ended up turning price lower.
Today, June 30, 2022, BTC's price has also fell below the .618 Fibonacci retracement of the corrective rally off June 18 lows. See the gold/yellow line on the 130m chart. This .618 retracement level lies at 19,474. This is a key level to lean on for shorting any moves lower. If BTC remains above 19,474, expect that bounces could continue higher to attempt to tag the upper Bollinger Band again, or perhaps as far as 22,036, the 21 EMA on the daily chart. Both these levels remain strong resistance at this point. Any short to the downside could measure risk against the .618 retracement for purposes of position sizing and stop placement.
In the coming days, volume may be lighter as the July 4th holiday means a 3-day weekend for major US indices. And because BTC has correlated to some extent with the Nasdaq 100 in recent months, it makes sense that BTC may consolidate for a few days, or work its way slightly higher or lower, over the 3-day weekend.
Note
While 19,474 is a key level to lean on for maintaining a short-term bearish view, 19,225 BTC, the level mentioned in the title, is the .618 retracement of the rally off the June 18, 2022 lows up to the swing high near 21,000 on June 26. See chart below. Essentially, the 19,225 - 19,474 will be a key range of support to watch. When this level fails as support, prices likely break to new lows. If prices move back above, short-term short trades should be covered.
Note
It's important to point out that on June 13, 2022, BTC sliced through a much more vital long-term level: its .618 retracement of the entire rally from the all-time low to all-time high. This level = 26425.90. Price has not even rise back to this level for a retest, which confirms the bearish potential. Note
BTC did not hold 19,225, a key Fibonacci level at the time this post was published. Any short trade at 19,225 would have been stopped. But the bear flag remains valid / intact. And because price has remained below major long-term levels (26,425 =.618 retracement of ATL to ATH range) and critical MAs, and b/c price remains bearish in nature—corrective, overlapping movement in a countertrend direction, the outlook stays bearish until more evidence arises of a substantial reversal.
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