Bitcoin has endured its most volatile week since late November with price swinging wildly between $7,400 and $8,400.
It is currently trading at $7,750 following a major rejection and subsequent sell-off from the $8,400 level of resistance.
BTC has however bounced by 2% from the low of $7,650.
Several analysts are still predicting that Bitcoin will surge through the $8,400 level of resistance in the coming weeks, with $8,850 emerging as a potential target.
However, price action to the upside will only come to fruition if Bitcoin can form a level of support by closing numerous daily candles above the $7,900 region, which held during September and on several occasions in the 2018 bear market.
The 200 exponential moving average (EMA) on the daily chart also serves as a tough hurdle to surpass for Bitcoin, with it clearly acting as a point of resistance throughout Tuesday’s rally to $8,400.
It is currently residing at $8,150 and has been a historic point of support and resistance throughout Bitcoin’s 11-year history.
Should Bitcoin reach this level again, another rejection in price could also be on the cards, which would almost certainly cause a dive in price back towards $7,400 and $6,800. This is reiterated by the rapidly falling relative strength index (RSI).
The daily RSI is now below 60 after topping out at 68, and while there has been a slight uptick in the past 24 hours, the immediate trend is almost certainly down.
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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.