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.
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
Image from TradingView
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