- Bitcoin holds above $8,500 after the support at $8,600 gave in to the selling activity.
- The bearish correction could be a reflex action to create fresh demand for BTC in a bid to push towards $9,200.
Bitcoin has had an interesting start of the year following the bull-run that catapulted it from lows at $6,500 in December to highs close to $9,200. The gains have seen experts in the industry including the co-founder of Fundstrat, Tom Lee who recently that he expects positive dynamics towards the May 2020 halving event.
Meanwhile, the January surge appears to have died and Bitcoin is struggling to stay above key support areas. At the time of writing, Bitcoin is dealing with a 1.54% loss recorded from the opening at $8,659 to the market value at $8,530.
BTC/USD 1-hour chart
The ongoing selloff is happening due to the failure to rise above the resistance at $8,700. Moreover, the support at $8,600 tried but failed to defend the losses. I would like to think that the retracement into the $8,500 zone is necessary to ensure that the bulls create fresh demand and relaunch the assault towards $9,000 and $9,200, respectively.
When technical levels are considered, Bitcoin is likely to dive lower towards $8,400 (possible support). The Relative Strength Index (RSI) re-entrance into the oversold region signals that selling is at its peak. At the same time, the Elliot Wave Oscillator has extended the bearish session since the European session Wednesday.
In the event both $8,500 and $8,400 give to the selling pressure, Bitcoin will find more support at $8,250 and $8,000 respectively.
Bitcoin Key Levels
Spot rate: $8,530
Percentage change: -1.54%
Relative change: -129
Trend: Strongly bearish
Support $8,500, $8,400 and $8,250
Resistance: $8,600, $8,700, $9,000 and $9,200