Bitcoin’s Break Below a Key Level has Opened the Gates for a Move to $5,900by Cole Petersen
- Following an extended bout of sideways trading within the $9,000 region, Bitcoin has now firmly broke below this range as it trades around $8,800
- Although the crypto has ardently defended its near-term support, its technical outlook does appear to be rapidly degrading
- Some analysts are even noting that its latest breakdown has opened the gates for it to see a movement that leads it as low as $5,900 in the weeks and months ahead
Bitcoin has seen much of its recently incurred technical strength degrade over the past 48 hours, as its ongoing break below $9,000 following a recent rejection at $10,000 is a dire sign.
It now appears that the crypto could soon target significantly lower lows if it is unable to garner any upwards momentum in the near-term.
One technical pattern even indicates that a movement as low as $5,900 is in the cards.
Bitcoin Sees Degrading Technical Strength After Sustained Move Below $9,000
Yesterday Bitcoin faced a sharp selloff that led it to decline from $9,100 to lows of $8,700. It was able to find some strong support here that ultimately allowed it to climb significantly higher.
The cryptocurrency has reclaimed its previous support at $8,800, but the buying pressure here has not yet been enough to catalyze any sharp movement back into the $9,000 region.
This ongoing downtrend has come about after BTC posted multiple firm rejections at $10,000, which pointed to some significant underlying weakness amongst buyers.
Analysts do believe that the cryptocurrency’s mid-term trend has now shifted in favor of bears, opening the gates for it to see a notable downtrend in the weeks ahead.
One popular analyst spoke about this in a recent tweet, explaining that he will now be looking for short opportunities going forward – with targets set at roughly $7,300 and $6,700.
“Likely done with any longs outside of intraday plays, i.e. longer swing positions, until we put in some type of strong PA down in blue. Call a spade a spade. Bitcoin is pretty formulaic, lose black and you are coming down to ugly numbers,” he said while pointing to the chart seen below.
Image Courtesy of Cantering Clark
BTC Could be Poised to See a Massive Decline
Although the aforementioned analyst noted that Bitcoin’s decline could lead it to lows of $6,700, another trader is explaining that one technical indicator suggests a movement to $5,900 could be imminent.
He points to two band formations on the crypto’s chart, noting that a rejection at the upper band signals that it could soon decline to the lower boundary.
“First clear close below the average for BTC. Bottom band target comes in at $7k with a double touch target looking closer to $5.9k. And yes, we typically do band to band runs.”
Image Courtesy of Cold Blooded Shiller
Featured image from Shutterstock.