Bitcoin plunged and reached the 11118 level in the morning. Price failed to stay above a broken dynamic resistance, so the current drop is natural. We’ll see what will happen in the upcoming days because the crypto is located above crucial support levels, a breakdown will signal a larger drop. Personally, I still believe that the corrective phase was natural after the last year impressive rally. Bitcoin squeezed in the last hours and could close the day above some very important support levels. A false breakdown below the broken dynamic support levels will signal an oversold and a potential rebound. However, is premature to talk about a rebound at this moment, I believe that we’ll have one only if the rate will come back much above the 13000 psychological level.

Bitcoin dropped also because the fundamental factors are very strong, there are many rumors that the cryptocurrencies are a fraud. Many specialists said that Bitcoin should drop aggressively in the upcoming period, but personally I still optimistic that it could start another leg higher in the upcoming weeks.

You can see on the Daily chart that the crypto dropped significantly after the retest of the fourth warning line (wl4). The rate failed to stay above the 23.6% retracement level and now it was almost to reach the 61.8%. Bitcoin plunged below the upper median line (uml) of the minor ascending pitchfork and below the median line (ml) of the minor descending pitchfork, but failed to reach the median line (ml) of the ascending pitchfork. A valid breakdown below the broken support lines will signal a drop at least till will reach the median line (ml) of the ascending pitchfork.

A larger drop will come only after a valid breakdown below the median line (ml) of the ascending pitchfork and below the 61.8% retracement level.  However, another significant upside movement will be validated only after a valid breakout from the minor descending pitchfork’s body.