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Bitcoin has seen some relatively lackluster price action in the time following the turbulence seen last Monday
Its ongoing bout of consolidation has made it increasingly unclear as to which direction it may trend in the days and weeks ahead.
There are a few overt factors that suggest the cryptocurrency is positioned to see some major near-term downside.
This weakness primarily stems from BTC’s inability to chew through the heavy resistance that sits within the upper-$9,000 region.
The horizontal resistance existing here also coincides closely with a key multi-year descending trendline that has been guiding it lower in recent times.
One analyst is noting that the crypto could soon decline to lows of $6,000 before finding any major support.
If it does visit its price region and finds significant support here, it is possible that it forms a massive inverse head and shoulders pattern that helps catapult it up to fresh all-time highs.
Bitcoin Continues Consolidating as Analysts Eye Overt Technical Weakness
At the time of writing, Bitcoin is trading up marginally at its current price of $9,760. This is around the price point at which BTC has been trading at throughout the past week.
Last Monday, the benchmark cryptocurrency rallied up to highs of $10,400 before facing a harsh rejection that led it down to lows of $8,600.
From here, buyers propelled Bitcoin higher, and bulls and bears have reached an impasse in the time since.
It is important to note that consolidation beneath resistance is typically bullish during uptrends, but the fact that BTC has been rejected in the lower-$10,000 region three times over the past six months seems to be a grim sign for its near-term outlook.
One analyst recently pointed to a few factors that have led him to believe that some near-term downside is imminent.
“Short BTC 9758. Buyers are unable to chew through whatever is sitting above. Acceptance back into yesterday’s session VA. 76% of the time it covers that range for target at the low… CVD divergence just adds to it,” he stated.
This Trendline Could Push BTC Down Towards $6,000
Another analyst recently pointed to a descending trendline as one factor that could spark some notable losses.
This trendline has been formed since June of 2019, and Bitcoin has not been able to surmount it over the past year.
The trader recently offered a chart showing that a failure to surmount this level could catalyze a movement down towards $6,000 in the weeks ahead.
He also notes that a bounce here could lead to the emergence of an inverse head and shoulders pattern that allows it to catapult up to fresh highs.
“BTC 1W TF- A more bullish long term scenario I have in mind, short & medium term is still bearish) expecting at least this level to be tested over the coming weeks,” he explained.
Featured image from Shutterstock.
