Bitcoin Price Analysis: BTC Plummets Below the Important Long-Term $6,000 Support Handle — Will It Drop Further?

  • The recent market collapse has seen Bitcoin price drop to a 12-month low.
  • The market has broken through a major long-term technical support area at $6,000.
  • Support moving forward: $5576, $5309, $5234, $5200, $5100, $5000, $4931, $4742.
  • Resistance moving forward: $5762, $5847, $6000, $6200, $6400, $6622, $6800, $7000, $7200, $7400.

Bitcoin has seen a turbulent previous 32 hours as the market has plummeted by as much as 16% to a price low that has not been visited since November 2017, located at $5432. At the time of writing, the market is trading around the $5,600 handle as the bulls begin their battle to reclaim the year-long supported $6,000 handle.

The past 32 hours have seen the entire cryptocurrency industry market cap tumble from a high above $210 billion on November 15, 2018, to a low of $175 billion on November 15, 2018.

Let us take a quick look into what happened to BTC/USD price action over the short term and provide potential areas of support and resistance moving forward.

So What Actually Happened to BTC?

On November 14, BTC/USD was trading at a comfortable price above $6,500 as the market continued to consolidate within the long-term consolidation pattern.

As the day progressed, we saw the initial signs of the nose-dive ahead when price action fall slightly below the $6,400. The chart below shows the severity of the Bitcoin price drop.

The bloodbath started at 14:00 UTC on November 14 as BTC/USD slipped from a high of $6,363 and fell 10% in a short 6 hours to a low of $5,678.

However, the carnage was not over. After a brief 3-hour attempt from the bulls, the sellers retook control and pushed BTC/USD even lower to reach a fresh 2018 low priced at $5,432 at 14:00 UTC on November 15, 2018.

What Made Bitcoin Price Drop So Drastically?

There has been a range of speculative reasons put forward as to why this short-term BTC collapse below $6,000 may have occurred.

The BCH Fork 

Bitcoin Cash is set to fork on November 15, 2018, as 2 camps of development teams separate and head in different directions. A hard fork is an extreme period of uncertainty within the cryptocurrency industry, especially if it is occurring with a top 5 project.

The BCH fork is a contentious proposal as it has the potential to slow down the Bitcoin Cash blockchain as well as the Bitcoin blockchain. Although the Bitcoin Cash split is likely to not affect Bitcoin itself, uncertainty within any market does not sit well with many investors as they flood to other assets during the turbulence.

A Technical-Based Price Drop

Another argument that has been presented is that this was purely a technical-based price drop as Bitcoin had been showing signs of not being able to break above the long-term consolidation pattern for many months.

The market had been trading within a long-term descending triangle formation since January 2018. Price action had been trading beneath a downward sloping trend line and supported with a base at $6,000 for the entire trading period of 2018.

The recent price drop had caused Bitcoin to fall below the $6,000 base, breaking a major technical support level that has been holding the market throughout 2018.

Let’s take a closer look at the charts to see the technical explanation for the BTC price drop.

Bitcoin Price Analysis


The chart above shows the long-term descending triangle pattern with the baseline at $6,000.

We can see that over the course of the year, Bitcoin had tried to break up above the upper boundary of the descending triangle a number of times without any long-term success. The market had also been supported at the $6,000 handle a number of times as the bulls defended the area with strength.

However, we can see that the recent price drop has caused price action to break well below the long-lived support at $6,000 as the market continues to create fresh yearly lows.

Let us continue to analyze price action a little closer over the short term and highlight any areas of potential support and resistance moving forward.


Analyzing the market from the short-term perspective above, we can see that the recent market plunge has seen BTC/USD head toward the $5,400 handle.

At the time of writing, the buyers have stepped into the market in an attempt to push price action higher as the market trades at $5,690.

Looking ahead, if the likely bearish sentiment continues to push price action lower, we can expect immediate major support below to be located at the short-term downside 1.414 Fibonacci Extension level (drawn in purple) priced at $5,576. This support is bolstered by a longer-term 1.272 downside FIbonacci Extension level (drawn in red), priced at the same level.

If the sellers continue to drive BTC/USD further below $5,576, then we can expect support below at the downside 1.619 Fibonacci Extension level (drawn in purple) priced at $5,309, followed by the longer-term 1.414 Fibonacci Extension level (drawn in red) priced at $5,234.

If the capitulation pushes price action below the $5,000 handle, we can expect support below at the long-term .886 Fibonacci Retracement level priced at $4,931, followed by the long-term downside 1.618 Fibonacci Extension level (drawn in red) priced at $4,724.

Alternatively, in our bullish scenario, if the buyers can regroup and start to reverse the price drop, they will meet immediate resistance above at the $5,847 handle (1.414 Fibonacci Extension level), followed by the previous $6,000 psychological support (now resistance zone).

The $6,000 handle had provided significant long-term support for the market during the entire year so it can be expected that this will now require significant momentum to overcome as the bulls try to break back above this newly created resistance level.

The RSI is trading at extreme oversold conditions, indicating that the sellers may be running out of steam soon. If the RSI remains below the 50 handle, we could see Bitcoin heading further lower toward the $4,000 handle.

Will BTC Price Drop Further?

A break below the $6,000 level could signal that the market is ready to head lower toward the $4,000 handle.

After the parabolic rise during late-2017, the market was content with holding above $6,000. However, the recent break has shown that this is now over, and there is potential to head lower.

Although it is too early to predict, a break below a major key support level on any market should not be ignored it provides signs that price is heading lower.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.