Despite seeing a swift rebound, Bitcoin bears were able to push the cryptocurrency below its crucial $9,000 support just minutes ago.
This breakdown has come about following a recent rejection posted by the crypto at $9,300, which appears to have become a resistance level.
The latest decline below $9,000 indicates that the buying pressure that has been holding the crypto above its lower range boundary is dissolving.
Analysts are now noting that the benchmark digital asset’s bears have been able to invalidate a bullish technical formation that buyers were attempting to form.
The invalidation of this pattern could fuel further downside, as there are now only a few factors working in favor of bulls.
Bitcoin’s Long-Held Consolidation Phase Drawing to a Close as BTC Breaks $9,000
At the time of writing, Bitcoin is trading down nearly 3% at its current price of $9,020. The crypto is currently trading a hair above its crucial support at $9,000, which was just broken below.
The trading range between $9,000 and $10,000 has been guiding Bitcoin’s price action for the past two months, first being established in early-May.
There have been multiple occasions – like today – where the crypto has ventured outside the boundaries of this channel. Each one has been short-lived, however.
Although the consolidation phase may not be invalidated until the crypto breaks below its high time frame support around $8,600, analysts are noting that its bullishness has been waning for quite some time.
One analyst explained that the longer this consolidation phase persists, the more it looks like a distribution pattern.
If confirmed, this would provide bears with a boost and likely result in a mid-term downtrend.
“The longer this BTC consolidation goes on, the more it looks like distribution ending in a descending triangle to me. Bullish feelings waning. Would reconsider over $9,300, and $97-$9800 is still the get excited level,” the analyst noted.
Image Courtesy of Jonny Moe. Chart via TradingView.
BTC Invalidates Bullish Technical Pattern with Latest Breakdown
Today’s brief dip below $9,000 struck a blow to the cryptocurrency’s near-term outlook.
According to another popular pseudonymous analyst, the crypto was in the process of forming an inverse head and shoulders reversal pattern.
The decline from its daily highs of $9,300, however, has forced Bitcoin below the neckline of this pattern.
“Bitcoin 4 hour – Breaking down through 9k, this latest drop invalidates a potential I-HNS reversal with a breach of the right shoulder. Same thing happened on June 25th,” he said.
Image Courtesy of Big Cheds. Chart via TradingView.
If BTC replicates the decline it saw in late-June after a similar invalidation occurred, it could plunge even further in the days ahead.
Featured image from Shutterstock. Charts from TradingView.