Bitcoin (BTC) has continued slowly grinding lower as bears gain the upper hand over bulls, and sellers have now led the cryptocurrency down to a key support level that must be defended or else it will open the gates for significantly further losses in the near-term.
Analysts are now noting that technical indicators may point to the possibility that Bitcoin is in the process of bottoming out, but BTC’s inability to post any strong bounce at $8,000 may point to an underlying weakness amongst the crypto’s buyers.
Bitcoin Falls to Key Support Level at $8,000
At the time of writing, Bitcoin is trading down nearly 5% at its current price of $8,160, which marks a notable drop from its daily highs of nearly $8,600 that were set yesterday morning.
Today’s dip to lows of $8,000 marks an extension of the sell-off that first occurred when BTC fell below $9,000, which had previously proven to be a strong support level for the cryptocurrency.
BTC did post a slight bounce at $8,000 today, signaling that this is a near-term support level that could bolster the cryptocurrency’s near-term price action.
One interesting factor that may play into Bitcoin’s near-term price action is the fact that leveraged funding is currently positive, meaning that there is a premium cost to enter long positions, which makes short positions a better value proposition at the moment.
Big Chonis, a popular cryptocurrency analyst on Twitter, discussed this in a recent tweet, explaining that it is currently a better value to countertrade using short positions until the ongoing downtrend begins shifting.
“$BTC – ever since the late October pump, Leveraged funding has been positive meaning there has been a premium cost to enter LONG positions even while #bitcoin continues to retrace, until this goes negative it’s still a better value to countertrade short, until proven otherwise.
$BTC – ever since the late October pump, Leveraged funding has been positive meaning there has been a premium cost to enter LONG positions even while #bitcoin continues to retrace, until this goes negative its still a better value to countertrade short, until proven otherwise ? pic.twitter.com/VLL8P2ILcX
— Big Chonis Trading? (@BigChonis) November 19, 2019
Technical Indicator Signals BTC May Be Bottoming
Despite Bitcoin’s bearish price action over the past few weeks, one technical indicator may be pointing to the possibility that it is currently forming a long-term bottom.
The Cryptomist, a popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, saying:
“$BTC: Don’t think it will be long until bulls in the short term take the wheel as RSI on various time frames look bottomed! I do think this will be short term, before further descend towards a final touch of wedge support.”
Dont think it will be long until bulls in the short term take the wheel as RSI on various time frames look bottomed!
I do think this will be short term, before further descend towards a final touch of wedge support pic.twitter.com/yaDFvPs0Hc
— The Cryptomist (@TheCryptomist) November 19, 2019
Bitcoin’s response to its support within the $8,000 region will likely provide deep insight into the current market structure, as a break below this level would point to underlying bearishness that could mean significantly further losses are imminent.
Featured image from Shutterstock.
