Bitcoin bore witness to an intense overnight decline that led it down to the sub-$9,000 region for a short while.
This dip was quickly absorbed by an intense influx of buying pressure that helped send the cryptocurrency surging back into the lower-$9,000 region – which is where it has been consolidating at for the past several days.
Bitcoin is likely to see some volatility in the near-term as it hovers around its key mid-term support level.
How it reacts to this level in the coming hours should offer significant insights into the state of the macro uptrend it has been caught within since rebounding from its mid-March lows of $3,800.
Analysts do believe that buyers still have the upper hand over sellers, and they may be able to catalyze a sharp upswing that erases the losses incurred in this latest overnight movement.
One trader is pointing to the fact that BTC’s recently formed price structure is strikingly similar to that formed in May just before the crypto rallied up towards $10,400.
Bitcoin’s Strength Falters Amidst Overnight Decline, But Macro Trading Range Persists
At the time of writing, Bitcoin is trading down just over 2% at its current price of $9,220.
Overnight, sellers pushed the crypto down to lows of $8,900, but the dip below its $9,000 support was enough to stop it from seeing any type of capitulatory decline.
As long as it remains above $9,000, buyers still have the ability to catalyze a movement and reclaim its latest trading channel between $9,400 and $9,800.
Because BTC has yet to post any sustained decline below its near-term support, this could be a sign of underlying strength amongst its buyers.
Josh Rager – a popular cryptocurrency analyst on Twitter – also explained that Bitcoin’s mid-term trading range is much larger than this, existing between $8,500 and $9,800.
He believes that BTC remains without a clear trend until one of these levels is surmounted in the near-term.
“BTC Price had a consistent $9400-$9500 range over the weekend without getting back over $9600 before the drop. I’ll look to scalp short a retest of resistance above $9250. Still not bullish unless $9800 is reclaimed. Still in one giant range, not big bear until sub $8500,” he said.
Here’s Why BTC Could Soon See a Sharp Rebound
Another analyst recently mused the possibility that the price action seen over the past week is similar to that posted by Bitcoin in May before it rallied from the mid-$8,000 region to highs of $10,400.
“And one chart for the BTC bulls. Similar structure to the last sell off that produced the low before the range high. Rising demand and consistent pressure against $10k? Or the beginning of the distribution markdown…” he noted while pointing to the below chart.
In order for this pattern to be confirmed, it is imperative that buyers step up and begin catalyzing some major momentum.
Featured image from Shutterstock. Charts from TradingView.