Bitcoin establishes key support above $7,000 as bulls target reversal

As Bitcoin slowly gains market maturity a new level of support has been established above $7,000, with bulls targeting a swift reversal

Bitcoin endured a turbulent yet significant year in 2019, surging from lows of $3,500 all the way to $14,000 before losing 50% of its value in a matter of months.

It is now trading above $7,000 following a minor scare in December that saw it slump to $6,450, although price action to the downside remains a daunting possibility over the coming months.

As previously reported by Coin Rivet, the exponential moving average death cross on the daily chart came into fruition on November 22.

Bitcoin proceeded to drop by more than 19% but it’s worth noting that EMA previous death crosses have caused 62% and 71% corrections to the downside.

However, if Bitcoin can close a daily candle above the 50 EMA at $7,525 it would signal the first signs of a bullish reversal, which could well spur a rally back into the $8,400 region.

Critical levels of resistance remain at both $7,900 and $8,400 but a rally on significant volume could prompt a breakout above these levels, with $8,800 becoming the next likely stopping point.

From a long-term perspective BTC is still in the midst of a bear market, with consistent lower highs coupled with dwindling volume becoming commonplace since last June’s high of $14,000.

Bitcoin bulls will be targeting a first higher high in more than seven months, which is what the market desperately needs to grab the attention of retail investors, many of whom exited cryptocurrencies following the dramatic slump from $20,000 in 2017.

Coin Rivet reported on the lack of retail interest in August by examining data from Google search trends. It found that the amount of people typing ‘Bitcoin’ into Google had dropped by 87% since the height of the bull market, which demonstrates how the public has fallen out of love with cryptocurrencies following the hype-fuelled mania two years ago.

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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.

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