- Bitcoin makes a quick return to $7,800 as the crypto market endures minor bloodshed.
- In the long-term Bitcoin looks extremely bullish especially the formation of a falling wedge pattern.
Bitcoin has resumed the downtrend after a brief stays above $8,000. The declines come after correction towards $8,100 became unsustainable. Most traders and analysts remain strongly bearish with some pointing to $6,000 as the next rendezvous. The downside remains acutely vulnerable to declines as Bitcoin refresh the one week support at $7,800.
Meanwhile, XBT/USD is dancing with $7,901 following a shallow recovery from the intraday low. If the short-lived correction tom$7,800 was to create fresh demand due to demoralization experienced by the buyers above $8,000, then we are likely to see action stirred up towards $9,000 in the coming weekend session.
XBT/USD four-hour chart
Looking at the chart from a technical point of view, Bitcoin’s return above $8,000 will not be an easy task. This is because the broken long-term trendline support has turned into a resistance zone with high congestion of sellers.
The Relative Strength Index (RSI) is still trending towards the oversold (levels under 30). The sharp drop signifies the strong bearish grip the sellers have on the price. Similarly, the Moving Average Convergence Divergence (MACD) trend in the negative zone indicates that bearish pressure is here to stay, at least in the short-term. The bearish close is evidence that selling activities are at their peak on Friday.
From a long-term perspective, Bitcoin is likely to close the year with a massive rally. The formation of a falling wedge pattern suggests that a breakout is in the pipeline.
Spot rate: $7,914
Relative change: -160
Support: $7,800 and $7,800
Resistance: $8,000 and $8,100
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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