mido-finance.com

Bitcoin price has started its correction from the sharp rise above $28K this week, with the current price trading at $26,800. With the Bitcoin market cap currently above $520 billion and overall dominance now above 71%, a correction has been on the cards for a number of days now.

$55 million worth of BitMEX short positions have already been liquidated in the last minutes, as fears of a reversal start to disseminate.

The $27,000 level seems to be providing some temporary intraday support right now as traders try to figure out if this is the start of the last major bitcoin correction we’ll see in 2020.

Price Levels to Watch in the Short-term

On the 4-hour BTC/USD chart, we understand that the bitcoin downtrend was foreshadowed by a long-legged Doji forming on the chart which is normally a sign of indecision entering the market. Whenever long wicks appear above and below a thin candle body, it signals that there is an even amount of high volume on both sides of the order book as both bulls and bears fight for taking control over the flagship cryptocurrency.

On the 1-hour MACD, we now have a bearish trend between the 12 and 24 moving averages and the first red candle on the histogram for the first time in 3 days.

Charted volume has already started to flip bearish, which a significant spike in selling pressure in the last 4 hours – during the early American trading session.

Looking at potential bitcoin support options beneath the $27,500 level, we have the following areas which should help to prop up prices during the drop:

(1) $26,850
(2) $26,500
(3) $25,800
(4) $24,785

Depending on the severity of the reaction to this new bitcoin bearish momentum, we could see the bottom of this drop reach as low as the major support bar at $22,600 before significant bullish volume returns.