The 4-hour chart shows that BITCOIN is trading under slight downward pressure, after having reached the psychological level of 50,000. Hence, we are observing a minor technical correction.
The 21 SMA located at 49,200 is exerting downward pressure, BTC has found strong support at 47,500. If you look at the chart, on August 13 BTC rebounded to the earlier highs of the year. That high has now become its immediate support.
The break of the 47,500 level would give BTC more bearish strength and push the price down to the levels of about 43,750. There is the 6/8 murray line that acts as strong support.
A pullback to the 49,200 zone as long as it remains below the 21 SMA will be a good selling opportunity with short-term targets towards 6/8 murray at 43,750.
The critical level if BTC breaks 50,000 is 51,600 as it represents 61.8% of the Fibonacci retracement. This level will be seen as a selling opportunity as it will confirm the continuation of the overall downtrend.
According to the chart, we can see the formation of a fractal which could also be the formation of the technical pattern called a head & shoulder with a neck line at 43,750. The price is likely to be in the process of forming the right shoulder.
The outlook will be bearish if this pattern is completed and if it is not invalidated. Hence, BTC could fall as low as 37,500.
Support and Resistance Levels for August 25 – 26, 2021
Resistance (3) 51,645
Resistance (2) 50,731
Resistance (1) 49,482
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Support (1) 47,277
Support (2) 46,073
Support (3) 44,864
