Bitcoin breakdown confirmed, or still a chance to avoid the drop?

The Bitcoin price has broken down out of a descending channel and has come back to confirm the breakdown. Is a deeper drop coming, or is there still a chance that the bulls can push the $BTC price back inside the channel and avoid a first stage drop down to $75K/$76K? Binance hack is nasty backdrop for Bitcoin While the U.

S. stock market could see a bounce this week, Bitcoin has more than economic indicators to cope with. The Binance hack, the biggest such hack of its kind, of the order of $6.

3 billion, is a particularly nasty backdrop. That said, of the $6. 3 billion, only around $1.

5 billion of that was in $BTC, equating to 18,270 BTC. A big sum, but Bitcoin has suffered from bigger losses in the past, admittedly over a longer period of time. It now remains to be seen how long it might take for the hackers to sell the Bitcoin.

If this isn’t very quickly, and that would be difficult for the hackers to do, the market could probably gradually absorb any sales without too much impact on the $BTC price. Breakdown and retest of the descending channel Source: TradingView The short-term 4-hour chart is not any comfort to bulls right now. It can be clearly seen that the $BTC price has broken down out of the descending channel and has very recently come back to test and confirm the underside of this channel.

To all intents and purposes, there would now be a descent, probably to $75,600. At the bottom of the chart, the Stochastic RSI indicators have just rolled over from the top, and in the RSI, the indicator line has been rejected once from a descending trendline. Will it be rejected again, making another confirmation for the rejection in the price action?

Fibonacci level retracements Source: TradingView If we are to have a real correction here, where is the $BTC price likely to go? Drawing out Fibonacci lines from the very bottom of the rally to its tip top we can see that the $BTC price is currently sitting on the 0. 382 Fibonacci - a relatively shallow correction if a bounce was to take place from this level.

Coming down a bit further, the 0. 5 Fibonacci level lines up perfectly with the $75K horizontal support. Given the importance of this support, this would be a great place for a bounce.

If we go to the deepest Fibonacci level at the 0. 786, depending on how long the correction might take, there is the possibility that the bull market trendline could ascend and make joint support with this Fibonacci level at $67,800. A redrawn descending channel puts the $BTC price back inside.

Was $75K the local bottom? Source: TradingView In the weekly time frame it can be observed that there is the possibility to bring the bottom trendline of the channel down slightly while still keeping the touch points. This then brings the current weekly candle back inside the channel.

The 50-week simple moving average, prospective support for the whole of the coming bull market, is just below, and could already have been retested by last week’s candle. If this is the case, the bottom may have already been at the $75K horizontal support level. This would mean that the Stochastic RSI indicator lines would have to start bending back around, probably finding support at the 50.

00 level. Is this about to happen, or is a deeper correction still on the horizon? Disclaimer: This article is provided for informational purposes only.

It is not offered or intended to be used as legal, tax, investment, financial, or other advice.