After hitting nearly $14,000 in late June, Bitcoin has disappointed investors by falling 50%. Bitcoin’s price action over the past five months appears to be forming a channel pattern as the cryptocurrency bounces between its downward-sloping support and resistance lines. A decisive, high-volume break above this channel would signal that further gains are likely ahead, while a break below this channel would increase the probability of further downside action. It is also important to keep an eye on the $6,000 support level that has played an important role in the past two years.
The weekly Bitcoin chart puts the $6,000 support level and the price channel of the past five months into better perspective. If Bitcoin is going to launch another bullish move, the $6,000 support would be an important base to do it from. If Bitcoin breaks below both its price channel and the $6,000 support level, it would increase the probability of further bearish action as the 2019 rally continues to unravel.
For now, investors and traders should keep an eye on how Bitcoin acts within its channel and at its critical $6,000 support level.