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Bitcoin has had a rocky past few days, surging to highs of $9,200 this past Saturday before meeting insurmountable resistance that has sparked a short-term downtrend. This downtrend has led BTC into the mid-$8,000 region, but the losses may not end here.
One analyst is now noting that Bitcoin recently closed beneath a key technical resistance line, which may signal that it will ultimately make a move down to its key support within the lower-$8,000 region.
Bitcoin Struggles to Build Upwards Momentum as the Case for Further Bullishness Weakens
At the time of writing, Bitcoin is trading down marginally at its current price of $8,650, which marks a slight decline from daily highs of just under $8,800.
It is important to note that Bitcoin has been able to bounce at $8,500 on multiple occasions over the past couple of days, signaling that this region could be a demand zone for the cryptocurrency in the near-term.
In spite of this, BTC’s recent rejection at $9,200 has damaged the cryptocurrency’s near-term technical strength, potentially signaling that it will continue dropping lower before it finds enough support to catalyze its next uptrend.
HornHairs, a popular cryptocurrency analyst on Twitter, believes that BTC could drop as low as the last weekly open at roughly $8,200 before it finds any meaningful support.
“Back in the lab, plans for the day: Play the sweep of either side of the current range created by this initial bounce, or short the breakdown back to last week’s open. Eye’s on the blue boxes as inefficient moves in which mostly one side is filled are typically retraced,” he noted while referencing the levels seen on the below chart.
Back in the lab, plans for the day:
Play the sweep of either side of the current range created by this initial bounce, or short the breakdown back to last week's open.
Eye's on the blue boxes as inefficient moves in which mostly one side is filled are typically retraced. pic.twitter.com/gIvpZ3se79
— HornHairs 🌊 (@CryptoHornHairs) January 20, 2020
BTC’s Close Below This Key Trendline Could Spell Trouble for What Comes Next
Josh Rager, another prominent analyst on Twitter, seems to concur with the possibility that BTC could see a movement down towards the lower-$8,000 region, but he first notes that he believes it could see a push up before this drop occurs.
“Daily closed under 200 DMA after an 8%+ drop. Could potentially see a push up before continuation down and watching the support at $8000 to $8200 for a bounce. Break below $7700 would be bearish but not expecting it drop that low at this point in time,” he explained.
https://twitter.com/Josh_Rager/status/1219372860239753221
The coming hours and days should elucidate the long-term impact of BTC’s recent rejection at $9,200, as any further near-term downside could mean that its recent highs will mark a mid-term top for the crypto.
