- Bitcoin longs traders look forward to an almost certain falling wedge pattern breakout.
- Bitcoin short term trend clouded by a bearish bias; targets $8,000.
Bitcoin perpetual swap contact longs traders on BitMEX margin trading platform have remained bullish despite the recent slump. In addition to that, the price is strongly pressed down upon by broken support areas that transformed into resistances. Besides, the price can be seen to be narrowing down below a higher low pattern towards $8,000.
Following the slump on Friday, Bitcoin’s price action has been lethargic under $9,000. A step above $9,000 failed to garner support hence Bitcoin slumped back into the $8,000 and even broken the weekend support at $8,600. A new November low has been formed at $8,550 and XBT/USD has adjusted to $8,747 (current market value).
XBT/USD daily chart
Technically, Bitcoin downside is still strongly bearish. For instance, the Relative Strength Index (RSI) is moving lower under the average. It has a target set on 40 but 30 is still within reach. If the RSI continues with the downtrend, it is likely that Bitcoin will disintegrate further towards $8,000 before finding a bottom.
In spite of the gloomy technical picture, the future is still bright for Bitcoin. The anticipated end-year rally is still possible especially with the formation of a falling wedge pattern. In classic technical analysis, this pattern signals a reversal following a continuous downtrend. In this case, I expect Bitcoin to explore the rabbit further towards $8,000 before a breakout is nurtured above $10,000 and heading to $10,000.
Bitcoin Price Technical Levels
RSI: Bearish bias
BitMEX Index Price: $8,750
Volume: $1.9 billion
Open interest: $826 million
Support: $8,400 and $8,000
Resistance: $8,800 and $9,000