- Bitcoin must defend $7,000 to avert a possible spiral targeting $6,000.
- The formation of a symmetrical triangle suggests that a rally towards $8,000 is in the offing.
Bitcoin has managed to defend the crucial support at $7,000. The downside price action follows a rejection from levels around $7,900. Bitcoin recovered significantly, pushing against several barriers from the recent slump to $6,530. The losses failed to find support in several areas including $7,700, $7,500 and $7,200.
Meanwhile, the price is teetering at $7,193 amid low volume and low volatility levels. The immediate upside is limited at $7,200 while further movement north will come face to face with the seller congestion at $7,400 and $7,700 respectively. The 50 Moving Average is holding ground above the price at $7,414. A confluence created by the 23.6% Fibonacci retracement level and the 100 MA suggests that recovery will not come easy.
Bitcoin futures contract on BitMEX is also trading within the apex of a symmetrical triangle. A break above the triangle resistance is likely to force a rally above $8,000. However, this will depend on the fundamental including, the volume and volatility as well as other technical indicators.
According to the Moving Average Divergence Convergence (MACD), Bitcoin is likely to settle in a sideways trend in the coming session. The largest crypto could close the week below the vital $7,400. Besides, if $7,000 support gives in, XBT/USD could spiral towards $6,000 riding on the impact of the triangle support breakdown.
XBT/USD Technical Levels
BitMEX index price: $7,197
Volume: $2.7 billion
Open Interest: $678 million
MACD: Suggests possible sideways trading