Bitcoin faced a flash rally yesterday evening that led the crypto to break above $9,600 before almost instantly incurring a significant amount of selling pressure that led BTC to plummet into the $9,300 region.
Bull’s inability to decisively close the cryptocurrency above its key resistance at $9,500 points to the possibility that bulls are losing their strength, and may even suggest that the crypto will drift significantly lower before buyers are able to catalyze another extended bout of upwards momentum.
Analysts are now noting that this latest firm rejection seems to suggest that BTC’s 2020 uptrend is over, and that the cryptocurrency could soon see a massive retrace down towards its year-to-date lows.
Bitcoin Struggles to Break Above $9,500, Leading Analysts to Flip Bearish
At the time of writing, Bitcoin is trading down 1% at its current price of $9,330, which marks a notable retrace from its daily highs of over $9,600 that were set at the peak of yesterday evening’s rally.
The fleeting nature of this rally may spell trouble for where Bitcoin trends next, as it suggests that the resistance around $9,500 may be insurmountable.
In the near-term, analysts agree with this sentiment, widely noting that this recent selloff has shifted BTC’s price action to be firmly bearish.
HornHairs, a prominent cryptocurrency analyst on Twitter, explained in a recent tweet that he believes BTC will see some further downside before it reaches a solid liquidity region.
“BTC: Price took out both last month’s high and November’s high last night and is now below the monthly open. I will likely operate from a bearish bias this week, seems like liquidity resides below, including a couple gaps yet to be filled on the CME chart,” he explained.
Price took out both last month's high and November's high last night and is now below the monthly open.
I will likely operate from a bearish bias this week, seems like liquidity resides below, including a couple gaps yet to be filled on the CME chart. pic.twitter.com/zir6x1zUYx
— HornHairs 🌊 (@CryptoHornHairs) February 3, 2020
BTC Could Plummet as Low as $7,500 in the Near-Term
This short-term bearishness may fundamentally alter the bullish market structure that BTC has formed over the past several weeks, potentially leading it to drop back into the $7,000 region.
Teddy, a popular crypto analyst on Twitter, spoke about this in a recent tweet, telling his followers that Bitcoin’s failure to post a higher high during its recent rally suggests a massive drop is imminent.
“New week new weekly candle… Previous candle was monstrous, as it went from mind 8s to high 9s – causing a storm of euphoria, volatility and FOMO. Technically, it wasn’t bullish enough as it was rejected from resistance and thus failed to mark a higher high,” he explained.
https://twitter.com/teddycleps/status/1224212909984600064?s=21
How Bitcoin responds to the support it has established around $9,200 should elucidate whether or not analysts’ current bearishness is truly warranted, as a strong defense of this level could allow BTC to continue pushing higher.
Featured image from Shutterstock.