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Bitcoin Outlook: BTC/USD Plunges to Trend Support- The 60K Struggle

Bitcoin Outlook: BTC/USD Plunges to Trend Support- The 60K Struggle

Michael Boutros, Strategist

Bitcoin Technical Price Outlook: BTC/USD Trade Levels

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Bitcoin prices plunged more than 15% off the record highs with BTC/USD dipping into initial support in early US trade on Tuesday. The decline comes on the heels of a reversal off key technical resistance and IF this move is just a simple correction, losses should be limited in the days ahead. These are the updated targets and invalidation levels that matter on the BTC/USD technical price charts. Review my latest Strategy Webinar for an in-depth breakdown of this Bitcoin setup and more.

Bitcoin Price Chart – BTC/USD Daily

Bitcoin Price Chart - BTC/USD Daily - Cryptocurrency Trade Outlook - Technical Forecast

Chart Prepared by Michael Boutros (log scale), Technical Strategist; Bitcoin on Tradingview

Technical Outlook: In last month’s Bitcoin Price Outlook we highlighted breakout targets into, “subsequent resistance objectives at the upper parallel / yearly high-day close at 62986 and the record highs at 64895.” BTC/USD failed a test of this key zone into the close of the month with a topside breach in early November quickly faltering as well. Is an exhaustion high in place?

Note that a price analog from the October 2020 breakout (in pink) suggests a period of prolonged Bitcoin gains with minor interruptions. IF price is going to follow this analog, a low would need to register in the next few days. Initial support rests with the May high-close / 25% parallel near ~589845 with broader bullish invalidation now raised to the September highs / lower parallel at 52956- both areas of interest for possible downside exhaustion.

Bitcoin Price Chart – BTC/USD 240min

Bitcoin Price Chart - BTC/USD 240min - Cryptocurrency Trade Outlook - Technical Forecast

Notes: A closer look at Bitcoin price action shows BTC/USD trading within the confines of an embedded descending pitchfork formation extending off the October / November highs with the median-line highlighting confluent support at the May high-close / 100% extension at 58984-59682- losses should be capped by this low IF price is heading higher on this stretch with a breach / close above 66325 needed to mark resumption . A break below this support zone would threaten a deeper Bitcoin correction with such a scenario exposing 56281 and key support into the lower parallel near 52956.

Bottom line: The Bitcoin pullback is testing uptrend support here and IF broken, could fuel a deeper correction in price. From a trading standpoint, be on the lookout for downside exhaustion ahead of 52956 with a close above 66325 still needed to mark resumption of the broader uptrend towards subsequent topside resistance objective at 77618 and 89645.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

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- Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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