Bitcoin [BTC] price dropped 3.2% on a daily scale yesterday, as it tested lows at $8280. While it closed slightly above the bottom wick at $7370, the bulls were not able to materialize a bounce.
The price of Bitcoin [BTC] at 2: 55 hours UTC on 24th January is $8284.
It has currently begun a downtrend on shorter-time frames. However, the lows are closing in onto a falling wedge pattern on the 4-hour chart suggesting a bounce soon.
George, a derivatives and crypto trader, marks the areas for a probable bounce, he tweeted.
Right into weekly/monthly key level. Close the day above $8430 and I’m pretty confident we revisit 9k’s.
The 200-DMA is currently at $8967.
Moreover, according to the volume profile indicating supply and demand range, the levels around $8000-$8200 are critical. Since it has a region of high volume profile the bulls will expect to hold above it. Trader Josh Rager tweeted,
$8000 to $8165 has been an important area since May ’19 Expect a bounce here, even if short term If price breaks the support w/ ease will likely continue down
It’s Like the Bears Never Left
Not only did the price get rejected from the 200-Day Moving Average, it is also back into the bounds of the long-term bearish descending triangle.
Derivatives and crypto trader, TraderXO, outlines a story of deviations in the recent bull run, suggesting that the last leg up could have been a ‘bull trap.’
During bullish times, Bitcoin [BTC] has had a tendency to always protect the 200-period weekly Moving Average (currently at $5211).
Nevertheless, if the price breaks the range support in the $7k range, a test of the MA is very likely. TraderXO also tweeted,
As I’ve stated like a broken record for the last several months 200 weekly MA around the range lows stands out for me the most – test the level and hold it = Im bullish! Forecasted trajectory at the range lows is 5.8 – 6k by end of Feb / March – lining up nicely for Q2/Q3
Hence, looks like $8500-$9000 is the barrier that the bulls need to overcome. On shorter-time frames a bounce at current levels would be welcomed. However, in the long-term it needs a break above the descending channel cleanly for a confirmed break-out.
Do you think the price will resume bearish momentum or bulls are here? Please share your views with us.
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Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com