Bitcoin corrects sharply as markets react to the US election

Bitcoin’s price needs to hold above $13,600 to prevent a bearish breakout

Bitcoin (BTC) bulls need to hold onto the support area around $13,600 if they are to keep bears at bay and repeat their recent push for a break above $14,000. Bitcoin’s resilience above $13,000 has so far helped keep sellers off this week, even as the cryptocurrency largely outperformed major altcoins and the stock market.

Yet, with the US President Donald Trump declaring victory even as vote counting continues, BTC price has corrected heavily.

The technical picture suggests that the BTC/USD pair is likely to swing lower again if bears succeed in taking it to a close below the critical support level around $13,600.

On the other hand, yesterday’s break to $14,064 remains important as another breakout will likely invite fresh buying pressure and send Bitcoin prices up again.

BTC/USD price outlook

As seen in the chart below, the BTC/USD price has traded in a series of higher lows and lower highs since yesterday’s uptick.

Bitcoin price hourly chart showing the plunge below key support levels. Source: TradingView

BTC/USD is trading towards the 50-SMA at $13,568, below which the 100-SMA provides further support at $13,086. If bears take out this zone, Bitcoin could plunge below $13,000 and open up a potential drop to the 200-SMA at $12,086.

Bulls need to retake control and push prices back above the 50-SMA and 100-SMA on the hourly chart. The 50% Fibonacci retracement of the swing high from $13,297 low to $14,064 high provides resistance at $13,693. If the decline continues, the 200-SMA provides immediate support at $13,620.

If bulls manage this and then crack the resistance at $14,000, a new high above Monday’s local top would be likely. The target would then shift to a break towards highs near $14,500 and $15,000.

BTC/USD price action on the 4-hour chart. Source: TradingView

According to on – chain data firm Santiment, Bitcoin’s rally to highs above $14K came despite a record 16-month spike in exchange inflow., traders need to closely watch the space as things might quickly change as the US election results roll in.