XBT/USD Analysis: Bitcoin Short Scenario, Why $7,000 Must Be Retested? BitMEX Margin Trading


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XBT/USD Analysis: Bitcoin Short Scenario, Why $7,000 Must Be Retested? BitMEX Margin Trading

  • Bitcoin loses ground above $8,000 following the rejection at $8,400.
  • The bulls are banking on the support at $7,800 to push for a return into the $8,000 range.

Bitcoin’s recent upsurge hit a daily supply zone slightly above $8,400. A reversal quickly ensued pushing BTC close to $8,000. However, the bulls rallied in support at $8,150 during the trading session on Wednesday. Another recovery attempt stepped above $8,300 but failed to sustain gains towards $8,400.

At the time of writing, XBT/USD is teetering at $7,964 amid a building bearish momentum. Besides, the rejection from the key descending channel, resistance appears to have significantly increased the bears’ confidence.

Bitcoin is currently banking on a couple of support areas; $7,900 (immediate support) and $7,800 (crucial support). In the event declines penetrate these two zones, Bitcoin could easily spiral to levels close to $7,000.

XBT/USD daily chart

XBT/USD price chart
XBT/USD price chart by Tradingview

On the other hand, the failure to break $8,500 could also mean that Bitcoin is not fundamentally ready for a reversal above $9,000. In this case, a return to $7,000 is likely to see increased buying activity, volume and momentum to launch a credible assault on $8,500 and $9,000 resistance.

From a technical perspective, the current bearish momentum will continue in the short term. The signals from the Relative Strength Index (RSI) hint a growing bearish grip.

The downtrend is also reminiscent of the $1.169 million shorts liquidated on BitMEX in comparison to $590k longs liquidated on the same platform. This scenario suggests that traders and investors are exercising their skepticism regarding Bitcoin’s hike to $8,400.

Bitcoin Key Technical Levels

BitMEX index price: $7,953

24-hour volume: $3.9 billion

Open interest: $716 million

Trend: Bearish

Volatility: High

Support: $7,800 and $7,400

Resistance: $8,000 $8,200 and $8,400

Author: John Isige
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
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John Isige 707 Articles
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
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