Bitcoin Price Breaks Out of Downtrend, But Gets Rejected at $8700 Resistance

Tony "The Bull" Severino

Last Updated: January 14, 2020 3:12 pm

2 mins read

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Bitcoin price has been on an absolute tear over the last 24 hours, rallying from lows around $8,000 to as high now as $8700, giving bullish crypto traders confidence that a near-term bottom is in, and more upside could be in the days ahead.

However, before bulls could celebrate a clean break of downtrend resistance, the number one cryptocurrency by market cap has been rejected at $8,700, potentially putting an end to the early January 2020 rally. But if Bitcoin can reclaim such an important level of resistance as support, the downtrend could be concluded and another, extended rally could follow.

Rejected: Bitcoin Struggling to Break Through Resistance at $8,700

Bitcoin is at a very important moment in its young history. The cryptocurrency took off in early 2019 on a parabolic rally that eventually formed an “echo bubble” fractal, topping out at $14,000 just shy of the crypto asset retesting its former all-time high.

After the rejection at that price level in late June, the leading cryptocurrency by market cap has fallen deep into a downtrend that eliminated over 50% of the asset’s value. The downtrend has now gone on for over six months, but may have ended with the formation of an inverse head and shoulders around recent local lows near $6,500 – a level said to be the “miner’s bottom,” or the point where Bitcoin mining breaks even with operational expenditures.

However, bulls aren’t in the clear and need to reclaim well above $8,700 through $9,100 as resistance turned support before the downtrend can be considered concluded. As of right now, Bitcoin price is still making an attempt to breach above $8,700, but a rejection is in the works.

The cryptocurrency may have formed a rising wedge pattern, a technical analysis formation that tends to reverse and break downwards. Commonly used indicators are also signaling that the rally may be coming to an end, as both the Relative Strength Index and MACD are showing overbought levels on daily timeframes, just as Bitcoin meets its most important resistance yet, dating back to the parabolic rally in mid-2019.

Ready for Bull? Downtrend May Be Over For Crypto Market

On the bullish side, Bitcoin price has broken out of the downtrend resistance trendline but will need to close above $8,575 on the daily for a candle to close outside the resistance. If the daily candle closes within the trendline, it could be a false breakout and fakeout upward before more downside in the future.

Clearly, though, these levels are extremely important for Bitcoin, and whatever happens at current prices could shape the near-term future of the crypto market as a whole.

Tony "The Bull" Severino

Tony "The Bull" Severino, CMT, is a distinguished figure in the cryptocurrency analysis sector, renowned for his in-depth technical expertise and innovative approach to market trends. As the Head of Research at NewsBTC, Tony leads a team dedicated to providing cutting-edge insights and forecasts, helping both novice and experienced traders navigate the complexities of the crypto market.
A seasoned Chartered Market Technician, Tony's prowess in identifying and capitalizing on market patterns is unmatched. His academic and professional journey in market analysis has firmly established him as a leading authority in technical trading strategies. Tony’s approach is heavily influenced by the principles of Elliott Wave Theory, a method known for its rigorous assessment of investor psychology and price movements.

Beyond his role at NewsBTC, Tony is the visionary founder of CoinChartist.io, an educational platform aimed at demystifying the nuances of cryptocurrency trading. CoinChartist.io serves as a valuable resource for traders seeking to enhance their technical analysis skills. The platform offers a range of learning tools and resources designed to empower traders with the knowledge to make informed trading decisions.

In addition to his educational initiatives, Tony is a prolific author and a dominant voice in the crypto community. He writes the CoinChartist VIP newsletter, a weekly dispatch that has become a staple among crypto enthusiasts, revered for its insightful analysis and actionable trading advice. This newsletter has consistently ranked as a best-seller on SubStack, boasting thousands of subscribers who rely on Tony’s expertise to guide their trading strategies.

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Before his ascent in the financial analysis world, Tony honed his skills in journalism. His background in this field has endowed him with a unique ability to present intricate market dynamics in a clear and compelling manner, making his insights highly sought after by a broad audience that ranges from casual readers to professional traders.
His professional affiliations underscore his commitment to excellence and continuous learning. As a partner of Elliott Wave International and TradingView, Tony collaborates with other leading experts to enhance his knowledge and skills. His active membership in the CMT Association further aligns him with the highest standards of industry practices and ethics.

Tony’s nickname, "The Bull," aptly reflects his aggressive and optimistic outlook on the cryptocurrency markets. His forecasts often anticipate significant upturns, earning him a reputation for bullish predictions that have frequently led to lucrative outcomes for those who follow his advice.

In summary, Tony "The Bull" Severino, CMT, is more than just a technical analyst; he is a mentor, educator, and innovator whose influence in the cryptocurrency space continues to grow. His dedication to advancing the understanding of market forces and his commitment to providing high-quality, reliable analysis make him a pivotal figure in the world of cryptocurrency trading.