- Bitcoin inches closer to a breakdown amid constricting Bollinger Bands and expanding volume.
- Bitcoin bulls must hold on to $8,050 for dear life as a drop under $8,000 could be detrimental.
Trading Bitcoin perpetual swap contract activity on BitMEX has gone down significantly. In fact, the data extracted by Datamish shows that only 9.18k of Bitcoin shorts having liquidated in the last six hours. However, no Bitcoin longs have been liquidated in the same period, see the table below.
In the meantime, the Bitcoin price is pushing consolidation above $8,000. All the attempts to pull the price above $8,200 have not yielded much. Bitcoin price is doddering at $8,077 after correcting lower from an intraday high around $8,114.
XBT/USD 1-hour chart
A building bearish momentum risks break a short term ascending trendline support. The Bollinger Band one-hour middle curve is position as immediate support. Moreover, the Bollinger Bands narrowing trend signals that a breakout or a breakdown is around the corner.
To predict the direction of the soon to come to break, let us look at the trend of the Relative Strength Index (RSI). The indicator has in the last couple of days been trending higher and forming a higher low pattern. However, the movement has not been sustainable above 60 which means that selling influence is higher than buying power. Meanwhile, the RSI is retreating towards 40 in a bid to signify the growing bearish strength.
The Above RSI coupled with the expanding volume sends out bearish signals. If the trendline support is broken, then Bitcoin will have no option but to let go of $8,000 and seek another key support at $7,800.
Bitcoin Key Technical Levels
BitMEX price index: $8,067
Volume: $1.4 billion
Open Interest: $848 million
Trend: Bearish
Support: $8,050, $7,800
Resistance $8,200 and $8,400
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Source: Coin Gape