Bitcoin Bounces, But Where Does It Go Next? Here’s What the Charts Say

In general, the market is bouncing today after spending most of the week heading in the other direction.

Thursday’s drop triggered $948 million in liquidations, 90.6% of them longs, per CoinGlass data. A liquidation is the forced closing of a trade placed with borrowed money after losses wipe out the collateral, and a long is a bet on rising prices, so the selling feeds on itself.

On the daily chart, Bitcoin hugs an important resistance market of $81,603, a level traders draw between a major low and high to estimate where pullbacks find buyers. Thursday’s wick to $79,711 dipped under it and under the 50-day exponential moving average, or EMA, a line weighting recent prices more heavily, now at $80,407.

The 200-day EMA sits at $75,759, about 8% below the current price, and with the 50-day above it, the long-term trend still reads bullish.

The Average Directional Index, or ADX, which measures trend strength without direction, reads 25.5, barely above the 25 line that confirms a trend, and sellers (DI-) lead buyers (DI+). The Relative Strength Index, or RSI, is a 0-to-100 momentum gauge where 70 is overbought and 30 oversold. That’s at 48.9, neutral with a slight lean to sellers.

On Myriad, the prediction market built by Decrypt‘s parent company Dastan, traders are placing odds at 31% that Bitcoin hits a high of $87,500 in October down from 45% on Tuesday. In a separate market, Myriad traders say there’s now a 43% chance BTC falls to $77,500.

The bullish scenario needs buyers to defend $81,603 and close above $84,246, opening $85,301, $86,644 and the $87,423 high, ideally with a rising ADX as confirmation.

The sideways scenario keeps Bitcoin between the $80,365 swing low and $84,246. The bearish scenario starts with a daily close below $81,603, putting $80,407 and $80,365 in play, then $78,003 and the $75,759 to $75,093 zone where the 200-day EMA meets the 50% retracement.