It has been a rough past few days for Bitcoin (BTC) and the aggregated cryptocurrency market, with the benchmark crypto’s ongoing downtrend leading most major altcoins to see capitulatory selloffs.
This bout of significant downside is occurring against a backdrop of bearishness within the global markets, and BTC’s confirmed status as a “risk-on” asset seems to suggest that it will continue seeing further downside until the global markets stabilize.
In spite of this, analysts are noting that there is one simple indicator that seems to suggest that the cryptocurrency could be poised for further near-term upside.
Bitcoin Struggles to Rebound After Plummeting to $7,700
$7,700 has long been an important level for Bitcoin, as this was where it faced some significant resistance in the early part of the year before flipping this into a strong support level.
It appears that bulls are once again stepping up to defend this level, as this is where the cryptocurrency plummeted to this morning before finding some support that has allowed it to inch higher.
At the time of writing, Bitcoin is trading down just under 7% at its current price of $7,780, which marks a notable decline from daily highs of nearly $8,800.
In the near-term, George – a popular cryptocurrency analyst and trader on Twitter – explained in a recent tweet that he believes how BTC responds to its current price level will set the tone for where it trends next, with a break above $7,850 potentially allowing it recapture its position above $8,000.
“BTC: LTF what I see. Smash above mid-range and we should be good for 8k’s. Sweep of those highs into grey and I will be fully out of longs and might flip short,” he noted.
LTF what I see. Smash above mid-range and we should be good for 8k's. Sweep of those highs into grey and I will be fully out of longs and might flip short. pic.twitter.com/IyiKoHThzH
— George (@George1Trader) March 9, 2020
This Simple Technical Indicator Signals a BTC Bounce is Imminent
Cold Blooded Shiller, another popular cryptocurrency trader, explained that Bitcoin’s Renko chart seems to suggest that the crypto is on the cusp of seeing a bullish movement, with a break above a recently formed descending trendline potentially allowing it to climb significantly higher.
“BTC: Renko showing the divergence all the way through this region, we’ve not had a significant divergence like this for a while. huge momentum on the selloff that’s been reducing since. When/if this flips bullishly, we’ll get a bounce. Breaking the trendline is a good start,” he noted while pointing to the chart seen below.
$BTC Renko showing the divergence all the way through this region, we've not had a significant divergence like this for a while. huge momentum on the sell off that's been reducing since. When/if this flips bullishly, we'll get a bounce.
Breaking the trendline is a good start. pic.twitter.com/0c8iBnvpU8
— Cold Blooded Shiller (@ColdBloodShill) March 9, 2020
The hours ahead should provide insight into just how deep this ongoing selloff will extend, as a failure for bulls to bolster its market structure prior to its daily close will mean further downside is imminent.
Featured image from Shutterstock.