- Bitcoin reignites the down on reaction to the rising wedge pattern break.
- The bulls must defend $7,200 for dear life or less the price spirals back to $6,500.
BitMEX margin trading is a pacesetter in the cryptocurrency market. According to the data by Datamish, a crypto platform that monitors data on BitMEX and makes a chart presentation, XBT/USD has seen 979,000 longs positions liquidated in the last six hours. At the same time, a mere 62,000 shorts positions have been liquidated in the same period.
XBT/USD Technical Analysis
The 2-hour chart clearly shows the contract trying to reverse the downtrend that has befallen it since the highs around $13,800 in June. The pressure on key support areas in November forcefully smashed towards $6,000. Fortunately, the high congestion of buyers at $6,500 saw Bitcoin reverse the trend not only stepping above $7,000 but also testing the resistance at $7,900.
Despite the recovery, the presence of the bears has remained to be a pain for the bulls. For instance, the retracement from the recent high at $7,854 continues to trim gains towards $7,000. The price has also corrected below the 100 Exponential Moving Average (EMA) and the EMA 50.
XBT/USD 2-hour chart
It is apparent that the break below a short term rising wedge pattern could spur more action to the downside further endangering $7,000. A return to $6,500 or even $6,000 still looms because Bitcoin is yet to find formidable support also known as a bottom.
According to the Relative Strength Index, Bitcoin has a bearish bias in the short term. The RSI is grinding towards the oversold as sellers tighten their grip. If $7,200 gives in, Bitcoin could easily spiral towards $6,500.
Bitcoin Key Technical Levels
BitMEX Index price: $7,183
Volume: $1.9 billion
Trend: Strongly bearish
Support: $7,200, $6,800 and $6,500
Resistance: $7,400 and $7,700
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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