- $6,600 supports the only fence between Bitcoin and $5,000.
- The falling wedge pattern support must be protected at all cost as it could be the next bull rally determinant.
Bitcoin battered bulls are not giving up hope. They have endured constant selling pressure since Friday last week. The dive under $8,000 literally opened the Pandora box as XBT/USD sunk beneath several key support areas including $7800,7,400, $7000 and $6,800. The Asian hours on Tuesday saw Bitcoin forced to accept a drab start to the week where it extended the bearish leg towards the key $6,600 support.
At the time of writing, a shallow recovery has pulled Bitcoin above $7,000. XBT/USD is exchanging hands at $6,717. The drop below $8,000 was mainly driven a break below the symmetrical triangle pattern. Increasing Bitcoin shorts positions was similar to adding fire to gasoline.
XBT/USD 4-hour chart
Consequently, Bitcoin is likely to continue with the downtrend especially if the support at $6,600 fails to hold. Moreover, the support of a forming wedge pattern must be defended by all means. A drop below the pattern could fuel Bitcoin towards $5,000 level.
On the brighter side, the falling wedge pattern resistance break could signal a credible and formidable reversal above $7,000 and towards $8,000. As get closer to the end of the year, Bitcoin is likely to change focus towards $9,000.
The RSI is still forming a lower high pattern. For sustainable gains, the pattern has to be broken to allow the bulls to take over the mantle. The volatility at the moment is still high, therefore, an improving technical picture will ensure that buying entries increase. For now, staying above $6,600 is key to making sure that $5,000 remains at bay while BTC shifts focus towards $7,000.
Bitcoin Technical Levels
BitMEX Index price: $6,665
Volume: $3.7 billion
Open interest: $670 million
Bullish Indicator: Falling wedge pattern
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