- Bitcoin price continues with the hunt for fordable support or bottom.
- The forming falling wedge pattern likely to force a reversal above $8,000 and towards $9,000.
Bitcoin has given up the support at $7,500 once again. The previous time BTC gave up the same support, the price plunged close to $7,000. The recovery on Friday last week failed to yield towards $8,000 forming a high slightly above $7,650. The retreat from last week’s high left $7,700 untested. However, Bitcoin appears to be holding ground above $7,400 short term support.
The return above $7,500 could take a while based on the fact that technical indicators starting to range. The Relative Strength Index (RSI) is horizontal above 40 following a recovery from lows around 23.56 in November. The RSI needs to move towards the overbought to ensure that bulls remain focused on the $8,000 psychological level.
BTC/USD daily chart
Consequently, the 50-day Exponential Moving Average (EMA) is expanding the gap beneath the 100-day EMA to show that the bears are gaining traction. The two moving averages will also limit upward movement at $8,000 and 8,467 respectively.
Due to the shrinking volatility and the lethargic technical levels, Bitcoin is likely to stay range-bound between $7,400 and $7,500. However, the formation of a falling wedge pattern suggests that the hunt for the much-needed bottom is not over. BTC/USD has a huge potential of dropping to $6,000 before effecting a significant reversal above $8,000 and focusing on $9,000.
BTC/USD Key Technical Levels
Spot rate: $7,482
Support: $7,400 and $7,000
Resistance: $7,500, $7,700 and $8,000.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige