Bitcoin dropped as much as the 46,000 level today resuming yesterday's sell-off. Technically, the cryptocurrency was somehow expected to drop after falling below the immediate uptrend line.
The USD's strength after the US inflation data release helped the sellers to take full control in the short term. BTC/USD showed exhaustion signs, so the downside movement was imminent.
Bitcoin trade at 51,164.20 at the time of writing, trying to come back higher and to recover after the last massive drop. The pressure remains high despite the current rebound.
BTC/USD Bounced Back!
BTC/USD found support below the descending pitchfork's median line (ml) again. This time, it failed to reach the downside 50% Fibonacci line.
It registered a false breakdown with great separation through S3 (47,653.98) and below the 47,464.65 static support, signaling bullish momentum. It managed to stabilize above the median line (ml) and beyond the S2 (50,299) on the H4 chart.
Bitcoin could come back higher to approach and reach the upside 50% Fibonacci line before dropping again. Technically, BTC/USD could move sideways between 47,464 and 59,499 in the upcoming period before choosing a new long-term direction.
Bitcoin Forecast!
A new drop and fixation below the descending pitchfork's median line (ml) should announce a larger decline. The level of 47,464 is seen as a critical support area, a valid breakdown below it signals more declines.
Consolidating above the median line (ml) and beyond the 50,000 psychological level could bring a new buying opportunity in the short term with an immediate target at the S1 (54,308).
The major upside target remains at the upper median line (uml) of the descending pitchfork.
The material has been provided by InstaForex Company - www.instaforex.com