This Pattern Could Send Bitcoin To $8,200 Where Bears Are Waiting
In the past few sessions, there was a sharp decline in bitcoin from well above the $8,200 level against the US Dollar. BTC price even broke the $8,000 support level and settled well below the 100 hourly simple moving average.
A new monthly low is formed near $7,638 and the price is currently correcting higher. It surpassed the $7,800 and $7,850 resistance levels. More importantly, there was a break above a declining channel with resistance near $7,800 on the hourly chart of the BTC/USD pair.
The pair is now trading just above the 23.6% Fib retracement level of the recent drop from the $8,755 high to $7,638 low. It seems like bitcoin is forming a rounding bottom pattern, which might spark a short term recovery.
The pattern resistance is near the $7,980 and $8,000 levels. A successful break above the $8,000 resistance is likely to send the price towards the main $8,200 resistance level, where the bears are waiting.
The 50% Fib retracement level of the recent drop from the $8,755 high to $7,638 low is also near the $8,200 area to act as a major hurdle for the bulls. Therefore, the price must settle above $8,200 to start a fresh increase towards the $8,500 and $8,650 levels.
Chances of More Losses
On the upside, bitcoin is facing two key resistances – $8,000 and $8,200. If it fails to clear either of them, there is a risk of more losses below the $7,800 level.
An initial support is near the $7,640 level, below which the bears are likely to aim a test of the main $7,500 support area (as discussed in yesterday’s analysis using the daily chart).