- Bitcoin price is still trading above the broken resistance trendline amid frequent decline movements.
- XBT/USD shorts traders must take Bitcoin to $8,500 to create fresh demand.
The strategy of ‘buying the dip’ has become the most used among Bitcoin investors. This because BTC has shown the potential to pull upwards after jaw-dropping free fall movements. A recent example is Bitcoin breakdown to $7,300. The move was followed by an unbelievable recovery move to highs almost brushing shoulders with $10,600.
Unfortunately, the strategy increases speculation which makes it hard to sustain an uptrend. For example, Bitcoin adjusted to levels below $9,500. The downside remained protected at 9,000 but movement north has been limited at $9,600.
Meanwhile, Bitcoin is trading at $9,189 after failing to stay above $9,200 (now short-term resistance). The 61.8% Fib level will try to stop the downtrend but I believe Bitcoin has to give in to the current selling pressure in order to find a credible zone to launch an action upwards. This in the way wars were fought in the past. Retreating does not mean defeat, it could be what is needed to launch one more attack to victory.
XBT/USD daily chart
Therefore, the best buying zone is the 38.2% Fib level, marginally above $8,500. This zone can also extend to $8,400 where fresh demand for XBT/USD will forge a formidable attack towards the coveted $10,000.
The Relative Strength Index shows that the bears will remain in control in the short-term. The wide gap between the 50-day MA and the 100-day MA stresses the influence the sellers have at the time of writing. In other words, the path of least resistance is downwards.
XBT/USD BitMEX data
Index price: $9,183.86
Volume: $1.7 billion
Open interest; $846 million
Funding rate: $0.0229%
Contract value: 1 USD