- Bitcoin retests the waters close to $7,000
- A recovery is heading Bitcoin’s way but intermediate losses will not be avoided.
Bitcoin continues to delay ‘Santa’s’ rally. Last week’s bullish momentum fell short of $7,700. Moreover, this gave the bears a chance to forge a revenge mission that saw BTC give up several support areas including $7,500, $7,400 and the latest $7,200.
Data by Datamish.com, a platform that monitors BitMEX trading platform, shows that Bitcoin longs traders have taken a step back. This perhaps, due to the failure to defend the support at $7,200 which further increases the risk of Bitcoin dropping towards $6,000. The platform, however, shows a maximum of $7.03 million shorts liquidated in the last six hours compared to $3.67 million longs.
XBT/USD Technical Analysis
The cryptoasset found balance at $7,050 where an upside correction was ignited. The ongoing recovery is supported by the Relative Strength Index (RSI), currently brushing shoulders with 40. The RSI recently dived to lows around 24 and touched a high of 50. The upside seems to be limited but continues to for a higher high pattern.
XBT/USD 1-hour chart
Bitcoin is also trading within the apex of a falling wedge pattern. If the ongoing correction is able to clear the wedge resistance, Bitcoin could easily scale above the initial resistance at the 23.6% Fibonacci level taken between the last drop from $7,692 to a low of $7,050 at $7,200.
The gap between the 50 EMA at $7,237 and the 100 EMA at 7,300 suggests that selling pressure is still present. Bitcoin must recovery the lost ground above $7,200 in order to pave the way for gains heading to $7,500. On the downside, defending $7,000 level is key to avoiding losses into the $6,000 range.
Bitcoin Technical Levels
BitMEX index price:
RSI: Gradually trending upwards.
Support $7,000 and $6,800
Resistance: $7,200 and $7,500
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Source: Coin Gape