- Bitcoin price forms a lower high and a lower low pattern within a descending channel.
- Lack of a catalyst could see Bitcoin dive to $8,200, create fresh demand and the rise to test $9,100.
Bitcoin price is battling to come out of the resistance presented by a short-term descending channel. The channel commenced following the devastating declines witnessed last week where Bitcoin corrected from $10,000 to levels under $8,500. The largest cryptocurrency has touched lows of $8,400 before recovering above $8,600.
At the time of writing, Bitcoin is trading at $8,600 after a 1% recovery on Monday. The bullish momentum that prevailed during the Asian session on Monday appears to be taking a breather. Besides, Bitcoin bulls need a lot of power to clear the resistance formed by the channel resistance and another descending trendline resistance.
BTC/USD 1-hour chart
Technical analysis clearly shows Bitcoin’s price is in the hands of the bulls. The Relative Strength Index (RSI) has recovered from the dip and is now moving upwards above 50 (average) in the hourly timeframe. Further movement north is likely to stir up growth above $8,700, besides $8,800 remains to be the buyers’ next target in their recovery journey.
Immediately limiting Bitcoin movements is the 50 Simple Moving Average (SMA) on the 1-hour chart. The 100 SMA at 8,686 is also a zone with high congestion of sellers and must eventually come down to pave the way for the desired bullish action. With the prevailing technical picture, Bitcoin is likely to have a wild week, first testing $8,200 before rising to test the zone at $9,100.
Bitcoin Key Levels:
Spot rate $8,600
Relative change: 75.31
Percentage change: 0.88%
Support: $8,400 and $8,200
Resistance: $8,800 and $9,000