Bitcoin found mauled by bears, survives the attack and is in stable condition
Bitcoin took a beating today currently futures on the CME are pegged at $10,750 down 6.2% or $710 on the day. The trend of BTC leading gold and silver while moving in the same direction continued, so am I convinced a correction has started or that we have major chart damage?
While I see the possibility of support coming in at the 50-day and .618% retracement from last year’s rally both at around $10,300, it seems more probable that we have entered a correction and will likely retest $9,500. The reason behind this logic is two-fold; First off is the shear size of the last two days and when BTC moves like this it tends to continue in big moves. Secondly and most importantly was the massive spike in volume in the CME that coincided with today’s drawdown. In fact, you have to go back to May 12th to see trading activity spike to this level.
The most telling facet of what Bitcoin futures will continue to do lies in its recent correlation to the precious metals. With gold futures seemingly poised to retest $1,900 and silver futures leaning towards a revisit to $26, we can only assume Bitcoin futures will follow suite. By this insight it seems likely that BTC has entered into a correction, at least a shallow one and will probably retest strong support at $9,500.