Bitcoin's price has broken a key support and has formed a downtrend as we'll review below. Because Bitcoin has invited many new traders and tons of emotion, the trend and technicals matter and can help you decide direction.
$9131 Broken, Headed to $7856
We drew two horizontal lines on the Bitcoin chart to show where key support/resistance formed. The arrows show you how these two price levels accounted for major turning points or breakout and breakdowns in Bitcoin.
We also drew a small trend line on the right side of the chart showing you the downtrend which forced a break of the $9131 support level.
The lower horizontal support line is $7856 which would be about 6% lower than the current Bitcoin price of $8351.
We would guess Bitcoin will drop and test that next key support line and from there we can reassess.
A snap back above $8351 would be needed not to be bearish about the short term trend.
Conclusion
News matters for Bitcoin but what probably matters more is the price itself. Since there are so many new traders and tons of emotion, price trends matter. Identifying the trend is critical in trading in general and Bitcoin in particular. Short term the trend has turned negative so we're now looking for Bitcoin to reach $7856.
