- A rising wedge pattern hints a breakdown of Bitcoin price below $7,000.
- Bitcoin must defend $7,400 support for dear life and focus on scaling the levels in the direction of $8,000.
Bitcoin’s recent recovery ran into acute selling pressure at the bear congestion zone around $7,700. Following the failure to break towards $8,000, the price corrected downwards. The path of least resistance has remained southwards. Bitcoin is trading at $7,470 after a shallow correction from $7,400 support.
The price is holding tight onto the support offered by the 50 Exponential Moving Average (EMA). On the other hand, the 100 EMA on the 4-hour chart is standing in the way of upward movement at $7,719.
XBT/USD 4-hour chart
The Relative Strength Index (RSI) shows a relatively improving technical picture. The indicator has managed to sustain a lower high pattern ever since Bitcoin corrected from the recent support slightly above $6,500. However, the RSI has not made into the overbought region, which is a positive signal because the asset is yet to be overbought. With the RSI pushing for correction above the average (50), Bitcoin is likely to continue hitting on the resistance at $7,500.
On the downside, the formation of a rising wedge pattern spells doom for Bitcoin price performance over the coming weekend session. If Bitcoin fails to break above the pattern resistance and in lieu the support is shuttered, the return beneath $7,000 will be a no brainer.
On the brighter side, $7,400 support is still intact. Moreover, $7,200 is likely to offer support while good congestion of the bulls at $7,000 will work tirelessly to prevent a fall towards the support at $6,750 and $6,500 respectively.
Bitcoin Key Technical Levels
BitMEX index price:
Support: $7,400, $7,000, $6,750 and $6,500.
Resistance: $7,500, $7,700 and $8,000.
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Source: Coin Gape