Bitcoin’s consolidation phase is showing few signs of letting up anytime soon. The benchmark crypto is still trading within the lower-$9,000 region, and the support just below its current price level appears to be significant.
As for where the market could trend next, analysts are closely watching to see how it reacts to a few key levels for insight into what could come next.
That being said, there are several factors that seem to suggest that intense downside could be imminent in the days and weeks ahead.
One prominent economist is noting that his ultimate near-term downside target sits around $7,700. He believes that the crypto could begin its descent down towards this target as early as this week, with it potentially being sparked by a selloff in equities.
Other traders seem to concur with this notion, as many are noting that the multiple failed attempts to rally seem to suggest that an intense decline lower is imminent.
Bitcoin Likely to Plunge Lower as Technical Strength Degrades, Claims Analyst
At the time of writing, Bitcoin is trading up just under 1% at its current price of $9,350. The cryptocurrency has been trading around this level for the past several days and weeks, struggling to garner any clear trend.
It is important to note that many analysts have claimed that this bout of sideways trading is BTC’s way of coiling up before making a massive movement.
Historically, bouts of intense sideways trading like the one seen presently are followed by massive movements.
With that being said, how this current trading range resolves will likely set the tone for where Bitcoin trends in the weeks and months ahead.
One analyst recently offered a chart showing that he anticipates the benchmark cryptocurrency to plummet down towards $7,500 in the near-term.
He explains that the past three attempts to surmount $10,000 have resulted in firm rejections.
Although he does believe that breaking this level is a question of “when, not if,” he still thinks it will see some near-term downside.
“There is very little doubt that 10k is THE resistance to break and even with a retracement here, it’s a question of when, not if. 3 attempts in the last 9 months, each equal high resulted in a longer consolidation at the resistance before breaking down. Don’t trust the 4th BTC.”
Image Courtesy of Cryptorangutang. Chart via TradingView
Economist: Stock Market Instability Likely to Pull BTC Lower
One economist recently explained that he believes Bitcoin is positioned to decline lower in the near-term due to potential turbulence in the stock market this week.
He believes that this will lead the crypto down towards the $7,000 region.
“Having a look at BTC technicals, I’d favor a move down to 8400-8100, back to the averages, prior to continuation higher. I’d buy that. Could see it early next week as equities push lower. The following area of interest is 7700-7800.”
Image Courtesy of Alex Krüger. Chart via TradingView Featured image from Shutterstock. Charts via TradingView.