Bitcoin (BTC) price still holding in spite of another red day

Selling pressure for $BTC from the Grayscale Spot Bitcoin ETF pushed the price down again on Thursday. However, $BTC is still holding the line. Could the price now collapse, or is there a relief bounce coming?

A 3.7% drop in the $BTC price on Thursday weighed heavily on the rest of the crypto market, bringing most altcoins much lower and adding to the market jitters that have been felt since the ETF approvals last week.

$BTC at the last line in the sand

Source: Trading View

Be that as it may, $BTC has managed to stay above the last line in the sand at around $40,600. A trend line going back to the end of August 2023 held the price up, together with support at this level.

A bounce has since happened, but it remains to be seen whether the bounce can turn into a decent move higher, or whether this is just a pause before $BTC loses support and plunges much lower.

Taking the price from the top $BTC reached on Thursday of last week, the price has lost 15.5%. This is already a fairly decent retracement, but it still might be expected that over the course of the next several weeks.

Fibonacci points to retracement levels

Source: Trading View

$BTC could draw back first to the 0.382 fibonacci level at $39,000, and then possibly to the golden fibonacci level of 0.618 at $34,000, and even back to test the base price structure at $30,000, which also happens to coincide with the 0.786 fibonacci level.

Looking at this weekly chart, it might be imagined that the chances of a fairly deep correction of up to nearly 40% could indeed play out. The upward price action has lasted for around a year, the wick left behind after the price touched $49,000 makes it look like a blow-off top, and a correction back to at least $34,000 would be very healthy for a continuation of the rest of the bitcoin bull market. Although the full correction back to $30,000 would be even healthier still.

Short term price action

Source: Trading View

Finally, returning back to the shorter term price action, $BTC looks as though it could confirm the underside of the channel before coming back down again. Conversely, if the price enters the channel again and consolidates inside, there is still a possibility of $47,000 and even a last assault on $50,000. Trade very carefully.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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