11.26 Bitcoin experiences a significant drop! Will it initiate a downtrend?
After Bitcoin's price surged to around 99600, it entered a regular weekend period, and the subsequent market trend began to decline. As the new week began, yesterday, the price suddenly experienced a rapid drop.
Initially, it found temporary support near 96000 and rebounded, but this rebound failed to break through the descending trend line. As we can see from the above chart, after failing to break through the trend line, another significant drop occurred.
The major drop happened early this morning, with the lowest price falling back to around 92500. As of now, the price has slightly rebounded, returning above 94000, approaching 95000.
The support level below the current price at 92500 coincidentally retests a previous high. The price had to break through this level to experience a significant rise, reaching nearly 100000, so this can be considered a major-level retracement.
We can clearly see this on the daily chart. Since the beginning of November, when Bitcoin started to experience a rapid upward trend, the bearish candle that closed yesterday is the largest retracement candle, indicating that Bitcoin has experienced its first significant retracement since the rapid rise.
We often say that trends have inertia, so I believe the probability of a direct crash after the first retracement is low. If Bitcoin truly does not rise again and initiates a downtrend, I think it will at least hesitate for a week at the top.
This means that within this week, if Bitcoin's price cannot recover the drop of today's bearish candle and continues to slowly probe new lows or oscillate downward, then by next week, Bitcoin may face the risk of a crash.
Therefore, I still hope that Bitcoin can quickly recover the drop of this bearish candle within this week, ideally bringing the price back above 98000. Such a trend could represent a simple retracement followed by an upward trend for Bitcoin.
