Bitcoin overview: Bitcoin bulls fall into bears’ trap
|- BTC/USD bulls are licking wounds under $3,800.
- More downside looks likely if the prices fail to recover shortly.
Bitcoin (BTC) broke above $4,000 only to crash spectacularly under $3,800 a few hours later. BTC/USD is changing hands at $3,779 at the time of writing, down 10% from the recent peak of $4,187. The inability to settle above critical resistance area after a breakthrough and develop a sustainable upside momentum bodes ill for Bitcoin bull, at least in the short run.
"What goes up must come down and that which pumps must eventually dump. That last sell-off is a sobering reminder that crypto is extremely volatile and high risk. Let's see if we can hold here $3,800 would be a nice place to build support, ”Matings Greenspan from eToro wrote in his Twitter account before the prices broke below $3,800 handle.
BTC/USD moved under DMA100 (currently at $3,780). Thus, now we are looking at $3,600, which is the next critical support for BTC/USD created by SMA200 (4-hour chart) and DMA50. Once it is broken, the downside may be extended towards $3,350-$3,300 congestion area.
On the upside, we need to see a recovery at least above $3,850 (SMA200, 1-hour). The next target is located at $4,000 and the recent high of $4,187.
However, considering the neutral position of the Relative Strength Index (RSI) and a lack of enthusiasm on the market after the sell-off, the bull might need some time to lick their wounds before another assault.
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