Bitcoin Just Hit a Crucial Trendline; Analysts Expect Imminent Fireworks
- Bitcoin and the rest of the crypto market has witnessed some bear-favoring volatility throughout the past few hours
- This came about following a day of relative stability yesterday, and it appears that Ethereum’s potent decline is creating headwinds for the rest of the market
- BTC is now trending down near a crucial support level that coincides with a key trendline
- Analysts believe that a continued bout of trading above this level could be all that is needed for the crypto to post a strong rebound
Bitcoin and the aggregated crypto market are currently experiencing some mixed trading. While BTC remains stable within the upper-$11,000 region, most major altcoins are currently plunging lower as Ethereum retests its key $400 support level.
ETH’s rather unexpected drop overnight appears to be the primary factor behind this latest decline, and a sustained dip below $400 might be enough to drag Bitcoin lower as well.
Where Bitcoin will trend next will also depend on its reaction to a crucial trendline test that it is currently undergoing.
A break below this level could spark a significant decline.
Bitcoin Maintains Above Key Horizontal Support, But Traders Grow Bearish
At the time of writing, Bitcoin is trading down just under 1% at its current price of $11,750. This is around the level at which it has been trading throughout the past several weeks.
It did break this trading range earlier this week and rallied as high as $12,400, but this movement proved to be highly fleeting.
Analysts are now expecting Bitcoin to see further near-term downside, which may come after it tests its key resistance at $12,000.
“If green demand holds we could take out those fairly equal highs before potentially moving lower. Let’s see what we get,” one trader said.
Image Courtesy of George. Chart via TradingView.
Here’s the Key Trendline BTC is Currently Testing
Another factor that may influence Bitcoin’s near-term trend is its reaction to a trendline that has been guiding it higher over the past couple of months.
One analyst put forth a chart showing how strong reactions to this level have been – highlighting its technical importance.
“There we go BTC, 4/4 on the second taps. The decisions are really made here, demand still present to hold or is it time for a deeper correction. Going to be an interesting day.”
Image Courtesy of Cold Blooded Shiller. Chart via TradingView.
If Bitcoin breaks below this trendline, the cryptocurrency could be in for some major downside in the days ahead.
Featured image from Unsplash. Chart via TradingView.