XBT/USD Analysis: Why Bitcoin Has No Choice But To Revisit $7,300? BitMEX Margin Trading

Crypto Market

  • The falling wedge pattern suggests that Bitcoin is grinding towards a breakdown.
  • $8,700 comes out as a strong support area but the immediate upside is capped by the 50 MA.

Bitcoin bulls are working extremely hard to keep the price above $8,700. This follows a shallow recovery from a previous dip towards $8,500. Bitcoin is trading at $8,740 and battling the resistance offered by the 50 Moving Average (MA) on the 1-hour chart.

XBT/USD 1-hour chart

XBT/USD price chart
XBT/USD price chart by Tradingview, BitMEX

A broader look towards $9,000 reveals more resistance at $8,800. Slightly above this, the 100 MA is pressing down on Bitcoin’s attempted recovery. From a technical point of view, the buyers have started to gain traction. The Relative Strength Index (RSI) is forging a recovery towards the average. The continued movement towards the overbought is likely to stir bullish action for Bitcoin.

The formation of the rising wedge pattern confirms that Bitcoin is bullish in the short-run but remains bearish in the long term. The pattern is used in classical technical analysis to signal a reversal in a continues up-trending market.

In this case, Bitcoin will eventually drop under $8,000 and explore the levels towards $7,300 (October support). At this point, fresh demand will be created forcing a recovery similar to the one that sent skyrocketed BTC to highs above $10,500 last month.

For now, the best the bulls can do is to sustain the price above $8,700 and focus on breaking down the Moving Averages resistance.

Bitcoin Key Technical Levels

BitMEX Index price: $8,729

Volume: $2.1 billion

Open Interest: $824 million

Trend: Bullish short term

Support $8,700 an $8,500

Resistance: $8,800 and $9,000

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