Bitcoin has finally succumbed to bearish pressure by falling below the $9,350 level of support following a three-month consolidation pattern.
In June, Bitcoin defied all odds by rising to its yearly high of $14,000 – its highest point since the $20,000 all-time high in December 2017.
However, four consecutive lower highs began to signal the beginning of a reversal in the market, with Bitcoin struggling to remain above the psychological level of $10,000.
The symmetrical triangle that had been neatly forming since June has now broke to the downside with violent conviction, with the daily volume eclipsing all previous records over the past three months.
Bitcoin finally bounced at $8,000 before retesting the 200 exponential moving average (EMA) on the daily chart, although a swift rejection from this moving average signals a lack of strength in the bounce.
With Bitcoin almost certainly moving towards a new bearish phase in the market, some new downside targets have emerged at $7,650 and $6,800 – the latter of which is in confluence with the weekly 100 EMA.
More than $700 million in long positions were liquidated on popular derivatives exchange BitMEX, which suggests that the move to the downside was unexpected despite being predicted by Coin Rivet analysts last week.
Price indicators have also been suggesting that the move to the downside has more room for extension. The daily relative strength index (RSI) is currently poised at 22 after slumping down from 50, although during last year’s drop to $3,150 it fell as low as 8.77.
For now, $7,650 to $7,850 seems to be the next port of call, but it wouldn’t be surprising to see Bitcoin succumb to more bearish pressure and fall back into the familiar $6,500 or even $5,900 regions.
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