Bitcoin Analysis Update! 5/27

I hope you guys were able to take a look at my analysis from yesterday as I laid out the possibilities of price movement after the recent pullback in Bitcoin and altcoins. We nailed one of the support levels and I wanted to provide a midday update to see where we are headed next.

I usually like to look at a 4 hour chart but the 6 hour is much cleaner to look at right now. So let's take a look...

So we knew that breaking that long term upward trendline was bad news. After a run up as massive as we have seen, the selling can become fast and furious as people look to lock in profit or panic sell after buying the top. The $1861 area held very well as an area of support (as mentioned in my last post) and we bounced rapidly off of it.

So what next?
Well, we are in a downtrend which is defined by lower highs and lower lows, for now at least. The next line in the sand is the downward trendline which is actually too steep to provide a huge area of resistance. Trendlines usually act as greater support/resistance if they are 45 degrees or less (this is what studies have shown). This downward trendline is about -63 degrees, so too steep to provide a huge area of resistance.

I have shown two possibilities of areas that may prove to be tricky. First, would be the downward trendline, which I believe will be broken to the upside. So where do we go after that? I believe we rally into the broken longterm upward trendline and test that before we: a) consolidate and head lower or b) Just another face ripping rally and it blasts through it to all time highs.

So if we do fail at the downward trendline, where to next?

The two areas that look like will hold price at least temporarily would be the $1860 area again (possibly form a double bottom), but if we break that, we are looking at the $1600 area.

Stay tuned as we finish out the day! Let me know if there are any other cryptos you would like me to analyze!

Disclaimer: All of the information presented is for educational purposes only. I do not not recommend the buying or selling of any of the mentioned assets. I do not assume any responsibility for your trading results. There is an inherent risk in trading cryptocurrencies due to volatility and liquidity so trade at your own risk!