Bottom Reversal Day BTC
As we have seen in the past, corrections in the cryptocurrency space are characterized by rapid declines that range between 30-40% drops. On the daily chart we can observe similarities with the most recent decline experienced in mid November. On November 12th we observed a bottom reversal candle: wide range (14% from the 6488 High to the 5555 Low) and substantial volume. If we take this as our base scenario we may witness a similar bounce to the upside. In this case the bottom reversal candle has the same characteristics as the past correction: a wide range (29% from the 15795 High to the 11159 Low) which in this case is even wider and heavy volume. We can also observe that the low neared the lower Bollinger Band in the prior decline and the RSI bottomed at 43.
In conclusion: the bottom reversal candle, support at the 43 RSI level, and an overbought Stochastic RSI may serve as bullish signals to enter a long position. If we are unable to hold the current support level (12345 Fibonacci 61.8% level) the next tests would be the 50% retracement level at 10131, followed by the 38.2% level at 7918.
In conclusion: the bottom reversal candle, support at the 43 RSI level, and an overbought Stochastic RSI may serve as bullish signals to enter a long position. If we are unable to hold the current support level (12345 Fibonacci 61.8% level) the next tests would be the 50% retracement level at 10131, followed by the 38.2% level at 7918.
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