Bitcoin crashed below $95,000 last night, sending a clear signal to the bears. However, around that price the bulls woke up again. It remains incredible how much support Bitcoin is able to find during corrections in this bull market.
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This line is crucial for Bitcoin
The Bitcoin chart below provides some crucial support lines for the digital currency. This concerns the 8-day, 13-day, and 21-day exponential moving average of the price.
Why are those moving averages relevant to Bitcoin? Because they are part of the famous Fibonacci sequence that many traders watch. In the Fibonacci series, each number is formed by the sum of the two previous numbers.
8 = 3 + 5
13 = 5 + 8
21 = 8 + 13
Technical analysts use Fibonacci numbers in their charts because the market often reacts to them.
Bitcoin currently has significant support at around $95,500. There we find the 21-day exponential moving average (21-EMA), and Bitcoin has not yet definitively broken through it.
The interesting thing is that that 21-EMA roughly corresponds to the 0.236 Fibonacci level. At that level, Bitcoin has lost 23.6% of the increase from $66,930 to $103,767. The market could find support there.
More important graphs
Of course, you should not view technical analysis as an exact science. Ultimately, it is just a tool to plot scenarios for the Bitcoin price.
Another “interesting” line that Bitcoin is currently hovering at is the 20-day moving average of the price. It is currently at $91,198, while the current price is $96,755.
However, we are looking at the daily chart, so this kind of thing only becomes relevant when we have at least one daily close below this level.
By the way, it would not be unhealthy at all if Bitcoin corrects from here to the level of 83,000 to 85,000 dollars. In previous bull markets, Bitcoin regularly experienced such corrections, which, as it were, reset sentiment.
The gigantic buying frenzy of MicroStrategy and the Bitcoin ETFs in the United States is probably the only reason that we have not yet seen a heavier correction.
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Source: https://newsbit.nl/bitcoin-crasht-naar-95-000-deze-lijn-is-nu-cruciaal/
