- Bitcoin price continues with the hunt for fordable support or bottom.
- The forming falling wedge pattern likely to force a reversal above $8,000 and towards $9,000.
Bitcoin has given up the support at $7,500 once again. The previous time BTC gave up the same support, the price plunged close to $7,000. The recovery on Friday last week failed to yield towards $8,000 forming a high slightly above $7,650. The retreat from last week’s high left $7,700 untested. However, Bitcoin appears to be holding ground above $7,400 short term support.
The return above $7,500 could take a while based on the fact that technical indicators starting to range. The Relative Strength Index (RSI) is horizontal above 40 following a recovery from lows around 23.56 in November. The RSI needs to move towards the overbought to ensure that bulls remain focused on the $8,000 psychological level.
BTC/USD daily chart
Consequently, the 50-day Exponential Moving Average (EMA) is expanding the gap beneath the 100-day EMA to show that the bears are gaining traction. The two moving averages will also limit upward movement at $8,000 and 8,467 respectively.
Due to the shrinking volatility and the lethargic technical levels, Bitcoin is likely to stay range-bound between $7,400 and $7,500. However, the formation of a falling wedge pattern suggests that the hunt for the much-needed bottom is not over. BTC/USD has a huge potential of dropping to $6,000 before effecting a significant reversal above $8,000 and focusing on $9,000.
BTC/USD Key Technical Levels
Spot rate: $7,482
Support: $7,400 and $7,000
Resistance: $7,500, $7,700 and $8,000.
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Source: Coin Gape