XBT/USD weekly price range 4800$-6200$ | The resistance price area run from $6200 to $7600 and is defined by the 1st and 2nd VWAP positive deviation line.
Last week I had hypothesized a correction down to the support zone between $6500 and $5400, so it was with a minimum at around $5500. I honestly expected less bearish pressure, but it is a long time that the XBTUSD cross does not return to the mean, our 2 months VWAP.
I think the correction is not over yet, most probably it’s time to test the 2 months VWAP which now is $4800. I think it is very difficult to reach the $3300 or the first negative price deviation line, this has not happened for many many months and such a drop might also help bitcoin cash to surpass bitcoin market cap, an event that could frighten the bitcoin community. Despite my personal bias about BCH I still own a part of the bitcoin cash obtained with the fork; for now I don’t sell them to help diversify my investment in cryptocurrencies during this period of high volatility and uncertainty.
The RSI oscillator would suggest a decrease but it is to be seen if it succeeds in bringing itself below 50, even here it is worth the same discourse done for the VWAP, it is a long time that the oscillator does not go into oversold territory so I would not be surprised to see it in that area during the week.
In the event of an unexpected catastrophic news, the support area on the weekly chart is updated to USD 3100-3700.
Many will think that the unexpected catastrophic event was the attack on bitcoin by some market forces, in this perspective I tend to disagree because we are very far from the support area calculated with 6-7.5 standard deviations. What we are seeing are the normal market forces at work among themselves, the strongest will win as well as in business in the end remains always and only one winner after a strong fight without mercy.