- Bitcoin bulls run out air after failing to break $8,800 resistance level.
- There is an obvious bounce scenario at the channel support as long BTC stays above the 200 MA.
The last two days have been mundane and nerve-racking for investors and the bull day trader. The diver of over $1,500 in less than a day crippled the buyers’ attempts to recovery yesterday. Bitcoin tested $8,800 seller congestion zone but fell right back under $8,500.
However, my daily chart shows a relatively positive picture of the largest cryptocurrency by market capitalization. The visible descending channel has been tested more than two times on both sides. On all those occasions the channel held and did not give in to the pressure.
XBT/USD daily chart
The channel in addition to the 200 moving average (MA) present two scenarios. The first is a buy opportunity for Bitcoin longs traders on BitMEX exchange because it is a no brainer bounce point for the price as long as the channel support holds as before. On the other hand, if the bulls fail to keep the sellers at bay and allow for a breakdown, a reversal would be imminent. In this case, a breakdown similar to the one suggested by an analyst on Twitter Trading Room could send Bitcoin to levels around $7,200 or even lower to $6,900.
ABSOLUTELY MUST READ
200 Daily MA Broken for TOTAL, MARKET must reclaim by tomorrow or else 6900-7200 is likely scenario for #BTCUSD in coming days
We are removing SL for our 7400-7600 Entry & adding 6900-7200 Entry for #bitcoin
MUST READ THE CHART COMMENTS pic.twitter.com/mVbVrEr4Pe
— Trading Room (@tradingroomapp) September 25, 2019
In other words, by all means, Bitcoin bulls must defend the channel support and keep the price above the 200 daily MA. If we dare to glance upwards, $9,000, $10,000, $11,000 and $12,000 will remain to be the critical psychological levels that Bitcoin must overcome to pave the way for a correction towards the coveted $20,000.
In the short-term, XBT/USD technical picture is strongly inclined to the bearish side. The moving average convergence divergence trend emphasizes that the sellers have the upper hand.
XBT/USD Key Technical Levels
Spot rate: $8,354
Relative change: -78
Trend: Strongly Bearish
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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