- Bitcoin opens the Pandora box with the retreat to $8,600.
- The correction to $8,400 might be necessary for the creation of fresh demand to aid in the recovery journey.
Bitcoin is trading 1.34% lower on the day amid a generally retracing cryptocurrency market. The losses occur after a bullish week that saw BTC surge incredibly to highs almost touching $9,000. Most experts had predicted that Bitcoin will increase in value before the May 2020 halving event but none knew that the bull-run will be so soon.
Meanwhile, the snag marginally above $8,900, resulting in Bitcoin losing balance and erasing at least $300. At the time of writing, Bitcoin is trading at $8,692 and seems to be struggling to hold above the short term support at $8,600.
BTC/USD daily chart
It is apparent that a reversal towards the psychological $9,000 will not come easy. Bullish action to the upside will also run into the resistance at the 200-day SMA. However, the rally has attempted to push the shorter-term 50-day SMA above the 200SMA in a bid to place Bitcoin in a longer-term bullish trend.
Technical indicators such as the Relative Strength Index (RSI) insinuates that the path of least hurdles is towards $8,000. In other words, if the RSI continues to fall in the direction 50 (average), Bitcoin could spiral further and even test $8,400. Expected support areas range from $8,400, the key level at $8,000 and last week’s support at $7,600.
Bitcoin Key Levels
MACD: Sticks within the positive region as bulls fight to take back control.
RSI: Downward slopping suggests growing selling pressure.
Key Support: $8,400 and $8,000.
Key resistance: $8,800 and $9,000.
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