On June 4, Bitcoin (BTC) broke its uptrend that has been since May. The dip has so far been caught at a critical support/resistance (S/R) zone.
It is important for Bitcoin to hold the area around $7,850 to $8,000; if it doesn’t, this dip could turn into a more extensive correction. The longer this dip lasts, the more likely it becomes to stay below the lost uptrend.
The next zones of support in this general area are $7,600, $7,300, and finally $7k. If these also do not hold, we will be in for a major and ultimately healthy retracement from Bitcoin’s highs.
Many were expecting Bitcoin to roll over as it has, because of last week’s candle close. A classic “doji” candle was painted on the chart, which often portends trend changes. In this case, the end of Bitcoin’s astonishing run from all the way back in February was clearly signaled by this candle. Of course, dojis do not always work perfectly, as we see evidenced on the Bitcoin chart in early April.