After a day-long period of consolidation within the lower-$6,000 region, bulls have once again lost their footing, with bears catalyzing a break below the support that had been established at $6,000.
This has led analysts to note that Bitcoin is fast approaching a “bounce or die” level that buyers must defend, or else the benchmark cryptocurrency could once again find itself caught within a capitulatory downturn that leads it to decline back towards its recently established lows.
This potential selloff comes as Bitcoin’s weekly close fast approaches, and a failure to bounce prior to this close could prove to be dire for the cryptocurrency.
Bitcoin Faces Massive Selloff as Buying Pressure Begins Evaporating
At the time of writing, Bitcoin is trading down over 5% at its current price of $5,900, which marks a notable decline from daily highs of $6,300 that were set yesterday when bulls attempted to garner some upwards momentum.
The failure for bulls to sustain this momentum led to a rejection at this level, with the subsequent downtrend marking a significant extension of that which was first incurred when the crypto’s strong rally from $3,800 stalled at $6,900.
In the near-term, it is imperative that buyers defend against a drop below $5,900 – as this is where a significant amount of support has been established.
This volatility also comes just a couple of hours before BTC posts its weekly candle close, with a bearish close likely bolstering bears, leading the crypto to decline further in the week ahead.
BTC Reaches “Bounce or Die” Level as Bulls Falter
This plunge has led Bitcoin to what appears to be a “bounce or die” support level.
Teddy – a prominent cryptocurrency analyst on Twitter – mused this possibility in a recent tweet, offering a chart showing that the crypto is currently resting on a key multi-week support level.
Image Courtesy of Teddy
If this level is shattered, the next key level marked on the chart above sits at $5,450.
Any potential near-term weakness could also be further perpetuated by the bearish economic backdrop that Bitcoin is currently trading against. If the stock market’s rebound seen throughout this past week shows signs of faltering, its next downturn could drag BTC down with it.
The futures market’s imminent open, coupled with Bitcoin’s upcoming weekly close, should offer investors with significant insights into where the crypto market is heading in the week to come.
Featured image from Shutterstock.
