Bearish engulfing Bitcoin candle causes major rejection from $8,400

Bitcoin experienced a crippling rejection from the $8,400 level of resistance overnight with a major sell-off backed by significant volume.

As reported by Coin Rivet in yesterday’s market analysis, the $8,400 level is the same point at which price was rejected on numerous occasions throughout September.

The daily candle also closed back below the 200 exponential moving average (EMA), which could suggest that more downside price action is to come over the next week.

The first hurdle for Bitcoin is to break past the $7,900 level once again after the 7.5% decline over the past 48 hours saw price slump back to $7,850.

A further sell-off from the current level will see Bitcoin fall back towards the $7,400 level of support, which was a notable point of resistance over December.

The daily relative strength index has also experienced a brutal rejection from the bullish control zone, dropping from 68 to 60 during the recent downturn in price.

For Bitcoin to play out the predicted bullish reversal, it needs to close daily candles above $8,400 with an aim at trading towards the $8,800 level of resistance.

However, in light of the recent descent, it seems more likely that Bitcoin will continue to drop back to where it was trading throughout December, just above the $7,000 mark.

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