A Look @ What I'm Seeing (BTC 12-hour candles)

https://www.tradingview.com/x/yhU5Ka1u/

The last remaining "intermediate" trendline (lower blue arrow) off of the December 2018 lows (near $3k) is being tested right now! What does this mean for BTC? It's statement time for the bulls/ bears. The price action at this line will tell a lot about what we should expect in the near term (weeks to few months outlook).

Worst Case :(

IF price breaks AND CLOSES below that trendline very quickly, without any signs of fight from the bulls (no price bounce from the line) and little to no volume, it's a good sign that price still has a good distance to fall, since we'd expect that people bullish on BTC overall (in the mid to long term) would see this trendline as a strong support/ good time to add to long positions.

Slightly Better Case :/

IF bulls put up a fight and lose (price bounces off of the trendline and remains above it for some time before finally giving out to selling pressure) and volume spikes from normal levels, that would be a bit more bullish sign that could signal a quicker bottoming process, though not necessarily an indication of less capitulation (in terms of price drop percentage). However, the higher the bounce and the greater the volume, the more bullish the case and the less likely BTC fails any further expected supports below this price level.

Best Case :)

Obviously, if the trendline never fails to hold, then us longs are golden... in the digital sense ;)

What to Expect if the Trendline (TL) Breaks?

How price and volume reacts to the TL (worst, slightly better) will indicate what to expect at the next expected support level(s). As per usual in technical analysis, when a support fails, we look to the next support level as a potential bottom. Where is that?

Let's Take Another Look (12-hour candles)

https://www.tradingview.com/x/0vOoYu44/

In short, there's a whole lot of 'em between the current price and around $7.5K, even when not considering "dynamic" supports like moving averages and indicator supports like MACD or RSI.

Different traders will have their preferances when it comes to determining the next potential price pivot (bottom or top) for their trades, but I've always preferred to look for a "confluence" of supports/ indicators as a way to establish higher odds that my trades go favorably.

While moving averages do weigh into this decision for me, the chart was cluttered enough by only including horizontal supports (horizontal red lines), the Fibonacci retracement levels (range of horizotal lines from $3,336 to $13,893 to the left of the current price) and the "confluence zones" (yellow boxes) between those types of support. I'll cover some important moving averages to consider in the next chart that I cover.

Horizontal Supports (based on the above chart)

1.) The double bottom at the highest horizontal support (top red line @ around $9,100) would be the first expected support and it would likely put up an equal amount of fight as the bulls put up on defending the TL, but the TL failing is a good sign that the same fate may be true of this support.

2.) The next support comes in at around $8,800, and also happens to be near the 50% retracement level ($8,615), making for the first confluence zone (CZ), or what I'd expect to be a more likely point of getting a strong bounce (not necessarily a bottom, but a point at which a profitable trade can be made to the upside).

3.) The third sits around $8,200 and while it isn't in confluence with a fib level it did have a history of strong support/ resistance in the past (as evidenced by simply looking left to the last points where price interacted with this line).

4.) Next we have support near $7,500, in confluence with a 61.8% retracement (off of the January of 2019 lows to the June highs) at around $7,369. I'd expect this to be a very strong candidate for an ultimate bottoming and pivot into a continuation of the prior bull-run, for a number of reasons, which I'll go into in the next section.

5.) This is close to the worst case scenario of a bull-market continuation, as it comes in at around $5,350, below a 78.6% retracement ($5,595), what I'm sure most of us would agree is an excessive amount of capitulation (assuming the bull trend will continue within the year).

6.) The likely worst case scenario (although I wouldn't consider it likely at all) would be a double bottom off of the starting point of this bull market, around $3,336, but I have a difficult time visualizing how this could ever play out and I can't imagine how overcome with fear a significant portion of "market participants" would be by this point. "Nightmarish" doesn't even capture the type of scene that I picture in my mind.

Speaking of which, the current fear index is 20 (extreme fear), from 32 (fear) only yesterday, according to the algorithm at the provided link (https://alternative.me/crypto/fear-and-greed-index/). Can you imagine what the number would be if support #6 were reached? Yeesh!

Other Support (based on the above chart)

The other major support to look at, aside from things like moving averages (more on this in the next chart), is the lower trend/ channel line (lower black line with the arrow). Any tests of this line should come with some buying interest, especially if they come within any of the horizontal support lines mentioned above, and doubly so if they happen to come near one of the CZs or moving averages that I'm about to cover (triply so if it happens at a CZ near one of those moving averages).

Diving Even Deeper - A Look at an Important Moving Average (BTC Daily)

https://www.tradingview.com/x/alMzcuez/

First of all, it's worth noting the breach of the trendline indicated by the blue line. Notice how bearishly price has reacted since closing below that. You might expect that closing below the longer standing TL would cause even greater commotion and you'd be correct to hold such a perspective.

The line that I really want you to pay attention to, though, is the red one - the 200 day Simple Moving Average (DSMA). That is ALWAYS an important moving average to pay attention to, particularly on the daily timeframe, when considering how strong a market truly is and what to expect at support/ resistance zones. The fact that this line is ascending is a good sign for bulls, however, the fact that price has traded so far above it and for so long a period of time isn't so bullish and this long duration without a proper test might be a big reason (if not the MAIN reason) why price is currently retracing.

Seeing as the price momentum is currently shifted in the direction of testing that moving average and that it will only likely increase in momentum if the major TL fails to hold off the sellers, the odds appear to favor a test of that moving average in the near-term more and more with the printing of every daily candle close.

In the event that the major TL and first support (double bottom) fails. this is where my gravitation towards support # 4 (the CZ around $7,500) as the most likely pivot price (into a continuation of the bull-run) comes from - confluence with this major moving average.

The 200 DSMA currently comes in at about $7460 and is increasing at a rate of about $40 per day, which would put it at about $7,500 tomorrow and while I certainly don't foresee price testing it this week, let alone by tomorrow, I'm aware that price tends to pierce through major moving averages when they test them for the first time after trading so high above them and for such long periods of time, typically only to make a long bottom wick and close above them (which would still qualify as holding up as support in my books).

Let's say we test this moving average two weeks into September, on the 14th, that's not an unreasonable amount of time to have such a drop in price, especially when considering the amount of fear that would likely enter into the picture when the aforementioned major supports fail. That's about 16 days out, which would put the 200 DSMA at around $8,100 (perhaps a bit lower, due to the printing of lower closes leading to the test), only $600 above the aforementioned CZ. BTC has put in far larger wicks to the downside in the past, both in terms of dollars and percentages. I don't think it's unreasonable at all to have that violent of daily price action, all things considered.

That said, there is a horizontal support near that area, at $8200, which would equate to a confluence of support, so it's not outside of possibility that price would simply pivot right at, or very near, the price of the 200 DSMA on the day of this hypothetical test, should it really play out on the timeframe that I've outlined.

...and Even Deeper - THEE Moving Average!!! (BTC Weekly)

https://www.tradingview.com/x/u7hBAV5b/

As I covered in a past blog post, the 20 weekly Simple Moving Average (WSMA) has been a very useful past indicator of where price is likely to pivot and move into the future. If you look at the chart, you'll see what I mean.

For instance, look at the last bull-run from August 2015 to December 2017 (about $197 to $19,800). Notice how many times the weekly candles came down to test this moving average (red line) only to close above it and then go on to make new highs shortly into the future. Yes, there were wicks below this line, but never a single close (outside of a minimal couple hundred dollars threshold) below it!

That is statistically significant, is it not? Of course it is. One or two, maybe even three times could be a coincidence, but surely seven times (the number of times it tested and held up as support in that 2015 to 17 bull-run) is more than just randomness.

Keeping that in mind, the 20 WSMA is currently $9,063 (including the addition of the current price for this weekly candle), less than $500 below the current price!

Could a test of this line be imminent? Will it happen this week? Will price wick below that dynamic support, as it has many times in the past (even reaching as low as the $7,500 area that I've picked as the highest probability price for a bull market continuation, in the event of the current TL and double bottom supports failing, only to close above the 20 WSMA)? Will it, dare I say, CLOSE below that moving average, perhaps giving the bulls some real reason to question the nature of the BTC market?

Only time will tell, but it helps to be aware that price needn't behave exactly as it has in the past (with regards to the various types of supports/ resistances) to prove to be a bull-run in the end. Of course, the same applies for the bearish case.

In Any Case

Thanks for reading :)

Also

I don't claim to be a professional financial adviser and I absolutely do not condone blindly following the opinions or advice of others, regardless of their claims or titles.

Be safe, live intelligently until you're wise, then let your wisdom be your guide :)