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Looking at the chart we see that the digital coin is currently trading at $3,960, after the price has earlier this week broken the support of $4,047, which is now acting as resistance; also, the newly formed support is now at $3,995. recently we saw the formation of a Bearish Marubozu pattern which is a bearish pattern and we can expect the price to trade around the support levels of $3,995, which can provide good buying opportunity.
According to Dow Theory the stock has moved from the accumulation phase to the participation phase and then to the panic phase and is expected to be there for some time. This can provide good buying opportunity, as the panic phase is again followed by the accumulation phase.
It is evident that the price is moving between the channels with the middle average line is acting as resistance and the lower limit line acting as support. We can also see that the channel is shrinking, indicating lesser volatility. Presently there is a negative momentum, so as the channel starts to expand again; the momentum will decide the direction and it can be very useful.
Taking 9-period moving (blue) averages with 21-period moving averages (red), the Bearish crossover is seen two times and the price is below the 9 period moving average, indicating a downward trend. We can therefore expect a correction.
Looking at the chart, BTC has broken the support level and is moving towards the new support at $3995, and we can expect the price to touch the support levels of $3,995 this week, so it is not suggested to take a long position at the moment. Given the conditions as seen in Dow theory, Bollinger Bands, and moving averages, all of them are indicating a correction, but this can provide us with good buying opportunity around the support levels, and also can be used for swing trading by buying around $3,995 and selling around $4,047.
It is suggested to wait for the price to settle before taking any position. Long term trend is still positive, provided that it is bought at the right price.