This morning, Bitcoin price made another push to the low $8,000 range but was unable to penetrate below the former resistance turned support and set a new local low.
Are bulls in the clear, or will bears once again regain control and push the price of the first-ever cryptocurrency further into a downtrend, putting any remaining gains from the entire 2019 rally at risk?
Bitcoin Price Fails to Break Below $8,000 After String of Red
Yesterday, Bitcoin price broke below $8,500 and before 24 hours was up, another $500 was erased from the value of the leading cryptocurrency by market cap.
Bears were able to keep the selling momentum going, taking Bitcoin price back down to the low $8,000 range. Bulls, however, were able to defend the critical support area, protecting the crypto market from further drawdown.
Related Reading | Uncommon Bitcoin Metric Suggests Massive Profit Taking Is Underway
The first-ever cryptocurrency is currently at an important junction, and one that may define the days ahead as the asset approaches its pre-defined halving – an event where the supply of BTC miners receive is cut in half, which can have a dramatic effect on supply and demand, and therefore price.
$8,000 is an important zone of support, which broke down back in October to a local low of $7,300. There, bulls took over and caused a short squeeze of epic proportions, causing a cascade of FOMO, stops being hit, and shorts covering – driving up the price of Bitcoin to as high as $10,500 before falling once again.
The powerful move from $7,300 was the crypto asset’s third-largest single-day performance in its short history, and the zone is likely being protected by bulls who filled long bids in that area.
$8,000 Is a Make It Or Break It Support Level for BTC
$8,000 is a critical support level that must hold, or a dramatic drop similar to what was seen back in November 2018 may be possible. Miner-related metrics suggest the primary market drivers could be close to capitulation – something that the last time around caused a 50% drop in Bitcoin.
A strong move below $8,000 would further cause long traders who bid in the low $7,000 range to close out, and stops below that area would act as rocket fuel, driving the price of Bitcoin down quickly.
Related Reading | Crypto Market Fear Index Suggests Bitcoin Price Has Further To Fall
Crypto investors who bought in on the way up during the early 2019 rally may be inclined to start selling at the last bit of profit. The domino effect could lead to brutal distribution, taking Bitcoin price to new local lows, or potentially to a new bear market low.
However, if bulls can hold $8,000 once again, and cause another powerful surge above current levels, it could be the final nail in the coffin for bears hoping to buy Bitcoin cheaper, as the resulting FOMO could potentially cause Bitcoin to set a new high, and continue on its next bull run.