After weeks of consolidation, bitcoin finally broke through support. The market now finds itself cruising toward prior lows. On expanding volume and spread, the bitcoin market appears ripe for a continuation of the downtrend:Figure 1: BTC-USD, Daily Candles, Broken SupportAlthough the current daily candle has yet to close, unless there is a strong influx of demand hitting the market, it stands to reason that bitcoin will be closing a new daily low for the first time since mid-December. Following the stopping action in the low $3,000s, the bitcoin market remained coiled for over a month. However, today marks the first break of these levels once marked as support. To illustrate how coiled the market was and how potentially large the following move could be, check out the 3-Day Bollinger Bands (bbands):Figure 2: BTC-USD, 3-Day Candles, Bollinger BandsThe figure above shows a very tightly wound, consolidated market — a market that previously took several months to consolidate. In just over two months, bitcoin has found itself prepped for another potentially large move. The first logical pitstop on its move is the retest of the prior low in the low $3,000 area. As we move up in timeframes, the weekly candles are showing a zone of support between $3,000 and $3,150:Figure 3: BTC-USD, Weekly Candles, Next Macro Support LevelThe $3,000 level is one of the few established levels that has proven to hold up during ...
