Bitcoin Price — Quick Take:
- The bitcoin price dropped more than 8 percent on a 24-hour adjusted timeframe.
- The cryptocurrency is attempting a pullback from a historically strong support area above $3,550.
- Further breakdown action could lead to a double bottom scenario.
The bitcoin price on Thursday plunged more than 8 percent across the Asian and European trading session, according to aggregated market data at CoinMarketCap.com.
The BTC/USD pair is trading at $3,635 on Coinbase at press time, up 2.7 percent from its session low at $3,556. It formed an inverse relationship with the US dollar, which appeared stronger owing to favorable macroeconomic fundamentals. The US Dollar Index, which measures the US dollar with six leading global fiat currencies, rose by 0.34 percent to 95.11 after dropping to a three-month low.
The bitcoin price has broken below its bearish pennant formation. The pennant’s dotted blue trendline represented as (B) indicates the failed support, while the upper trendline (A) is still looking strong as the session resistance.
There are now two possible price actions left for bitcoin from here: either it could attempt a pullback or could further extend its downtrend. Let’s discuss the first scenario first.
In our opinion, bitcoin is trading inside a false breakout area. There are six separate instances whereby this area had proven to be decent support and resistance (depending on the direction of the trend). The small square boxes in blue indicate how bitcoin price has tested the area between $3,556 and $3,652 before. During a majority of the sessions,