On the positive side, if we hold in this area, all the back and forth trading will work to build strong support under this market and enable bitcoin to propel to new highs. The longer we stay above $12k, the more likely bitcoin wants to remain above $12k.
However, we have to be ready for potential move lower. This market took a big nosedive low and has now failed to recapture the green resistance line. Once resistance fails, markets tend to retest support. They need to. But if the retest fails, then going significantly lower is more likely. In other words, we won't just go to $11500 if we break $12000.
The big problem with bitcoin is that it moved straight up without ever building much support. It was fun to watch it go up 20% every day without a pullback but as we can see we have very little in support to hold us now.
Here are the critical areas:
Green Line - This was support a few weeks ago and then became the that collapses. It then became resistance on 12-23 and we momentarily broke that resistance but eventually failed on 12-27. Regaining this line and I'm .
Yellow Line - This was the first resistance line in the recovering. It caused a drop on 12-19 and forced 2 drops on 12-22 before recovering then forced a drop on 12-24 and 12-25 before we finally moved up past resistance. We tried moving above that this morning on 12-28 and failed again.
Orange Line - This was support on 12-6, 12-9, 12-10, 12-24 and 12-25. It held again this morning, 12-28. If this falls, we are in danger of testing the lows.
Red Line - This was support on 12-9 and several times it supported the first major fall on 12-22. It was twice support on 12-24. If this line falls, we are going lower.
Purple lines - These are areas of support but I wouldn't call them strong support. I would expect at least some kind of bounce in these areas and they could potentially become support areas if we end up moving sideways after a plunge.
Blue Line - The strongest support comes at $8300 on this chart and I believe it becomes a magnet if we fall past $12k. It ends up being the 1.3812 fib extension of the move down that retested the .618 pullback. It would also be the .786 pullback overshoot from the $1.00 to $20,000.00 super cycle move.
If we fall below $12k, more careful analysis would be needed to help identify support.