BTC tumbled sharply earlier today, coming within 400 of the 42,500 target we discussed on Aug 25 [see More of the Same]:

BTC reversed just short of its .618 Fib. Although the cloud remains bullish and it’s above all of its SMAs, it feels tenuous to me. I think we get a cloud backtest here, ideally at the 42,500 level.

It rallied from its lows to close above its SMA200, which is about the only bright spot on the charts. Will it hold?

continued for members…Remember, we have been looking for a cycle low in October, which is just around the corner. The failure to hold the .618 Fib and head up to the .786 was a sign of significant weakness.  A failure to hold the SMA200 would leave the cloud and the yellow channel midline as the only significant support between current prices and 23,600. The RSI chart suggests more downside. But, cautious traders might wish to hold off on shorting until BTC drops back through its SMA200. Very cautious traders might wish to keep an eye on the support offered by the cloud and the RSI trend line.GLTA.