While the analysis is not calling for a drop to $5,300 or $4,100, Bitcoin’s price action on multiple time frames suggests further downside so it’s crucial to be realistic and honest, rather than driven by emotion and hope.
On the bright side, there’s always the possibility that the price could form a double bottom at $6,520, a point that was seen on Nov. 25 and May 17, 2019.
Ultimately, Bitcoin price needs to hold the pink highlighted zone between $6,700 and $6,300 to avoid a drop back toward the May through April lows in the $4,900 to $5,500 region.
In the meantime, traders should keep an eye out for a possible double bottom around $6,530 and given that the daily and weekly RSI and Stoch are oversold, aggressive traders might look to play an oversold bounce, which seems ripe to take place as Bitcoin comes closer to falling below the long-term descending channel support at $6,400.
Cautious traders can observe to see how traders and price react to this oversold bounce (if it even happens), and they can also watch to see if the daily RSI becomes deeply oversold to form a double bottom at 22.
A relatively risk-free trade might involve playing a bounce at $6,500 to $6,400 with a stop loss placed closely below the entry. If this tactic proves fruitless, then the next option might be setting up a low leveraged long at $5,300 or at least looking to play a deeply oversold bounce at this price.
The views and opinions expressed here are solely those of the author (@HorusHughes) and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.
