XBT Analysis: Bitcoin Dangles At $7,200, Downtrend Eyes $6,000 – BitMEX Margin Trading

Bitcoin BTC

  • Bitcoin bulls wait anxiously for the falling wedge pattern breakout magic.
  • Bitcoin technical levels stuck in the negative as sellers trample on the buyers.

Bitcoin perpetual swap contract by BitMEX is leaning towards a downward momentum mid-through the week’s trading. From June 2019 highs close to $14,000, the largest cryptoasset has been trimming gains profusely. However, recovery movements have also been numerous. Although, none has been forthcoming with the strength to push Bitcoin above $14,000 and towards $20,000.

The losses from the 2019 high have been forming a higher high and a lower low pattern. The combination of both trends created a falling wedge pattern currently grinding towards a breakdown. Unfortunately, the breakout will not be immediate because XBT/USD is still in the hunt for the bottom or reliable support.

XBT/USD daily chart

XBT/USD price chart
XBT/USD price chart by Tradingview

At the time of writing, Bitcoin price is dancing right at the edge of a cliff, which is the 38.2% Fibonacci retracement level, taken between the last swing high of $13,916 to a swing low of $3,163 at $7,215. The contract is valued at $7,215 amid the expanding volume and shrinking volatility.

If the $7,200 support level is broken, Bitcoin bulls will try to find support at $6,800. Based on the prevailing trend, Bitcoin could refresh $6,500 and even extend the bearish trend to $6,000 before resuming the uptrend.

The Relative Strength Index (RSI) recovery hit a dead-end above 50 and is now dropping towards the oversold. Further correction downwards will only serve to encourage the sellers to increase their entries.

XBT/USD Technical Levels

BitMEX index price: $7,215

24-hour Volume: $1.68 billion

Open interest: $692 million

RSI: Bearish bias

Support: $6,800 and $6,500

Resistance: $7,500 and $8,000

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