BTC-“Watch-Out for Short-Coverings”

3-Day Analysis:

Big Picture: On the 3-day time period, the ongoing downturn is forming a falling wedge formation. If broken to the upside, this pattern favors a positive outlook. Furthermore, the pattern appears to be developing precisely around the weekly support levels. Multiple supports merging in this area could trigger a surprise short-covering event, driving the price higher.

On the Upside intraday resistances are also accumulating at 26,200 to 26,600 levels. This area has many horizontal resistances in between, as well as the 12-hourly EMA-200 level. This spot was regarded as an obstacle for the session, and bulls would need to be aggressive to overcome it. However, if prices surpasses this region, it could assist in causing significant short-coverings, which will drive the price higher towards the 27,230 mark, followed by an additional push.

On the Downside 3-Day EMA-50 has been the primary protective support for the previous several sessions. Furthermore, the existence of numerous strong supports in this region below makes it a big support region for Bitcoin. This region has been responsible for keeping Bitcoin protected from hyper-selling. Going ahead, the existence of numerous time-frame supports in this region might lead to a surprise upside, since there is very little likelihood that sellers will break through these supports on the initial attempt. Despite having a lesser possibility of success, the Bulls will be dealt a severe blow if sellers are successful in breaching the supports.