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Bitcoin Just Dropped Below a Key Level That Could Spark a “Nasty” Selloff

Avatar Cole Petersen 1 month ago

Bitcoin’s volatile week has shown no signs of slowing down, as BTC bulls made a fleeting attempt to propel the cryptocurrency over $10,000 overnight which was closely followed by yet another sharp selloff.

This movement comes close on the heels of the crypto’s recent flash crash, which sent BTC from highs of $10,200 to lows of $9,200.

Despite the selloff following this rally, Bitcoin was able to post a weekly candle close above a key support level that it has now broken below. If the crypto is unable to reclaim this level throughout the coming days, it is possible that its near-term price action will be “nasty.”

Bitcoin Struggles to Break Into $10,000 Region as Bulls and Bears Remain at an Impasse

At the time of writing, Bitcoin is trading down just over 1% at its current price of $9,760, which marks a slight climb from daily lows of $9,600, but a decline from highs of just over $10,000.

In order for buyers to maintain Bitcoin’s bullish market structure and potentially extend its uptrend, it is imperative that bulls decisively recapture BTC’s position above $10,000.

Teddy, a prominent cryptocurrency analyst and trader, spoke about Bitcoin’s recent price action in a tweet, explaining that the crypto’s rejection at $10,000 means it is a lower-high that could lead BTC down towards $9,400.

“BTC: Arguably the last 10k attempt and rejection can be seen as the marking of another lower high. Continuation of bearish structure will see a low below 9400,” he noted.

BTC Broke Below This Key Level; Here’s What a Close Below It Could Mean

It is also important to keep in mind that BTC has been struggling to maintain above the upper boundary of an incredibly wide multi-month trading range.

Yesterday, the crypto was able to close its weekly candle above this level, but it is currently trading beneath it.

Teddy also spoke about this in a tweet, pointing to a chart showing that a close below this could lead the crypto to reel down to as low as $7,600 – which is the lower boundary of the range.

“BTC: Weekly candle closed yesterday, and by miracle it closed above the range. Dumped immediately afterwards, but technically the greater trend’s bias is still bullish as long as it continuously closes above it. Close below, nasty af,” he noted.

If Bitcoin is to see further gains throughout the year ahead, it is imperative that bulls garner greater buying pressure and continue pushing it higher in the week ahead.

Featured image from Shutterstock.
Cole Petersen

Cole is a cryptocurrency analyst based in Los Angeles. He studied at the University of California Irvine and has covered bitcoin and the crypto markets since 2017.

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