After holding Bitcoin’s price above its key support that had been established within the lower-$7,000 region, the cryptocurrency’s bears have prevailed over bulls, and are now attempting to hold BTC below its previous support at $7,000.
Analysts are now noting that the crypto could soon see a strong bounce, as it is currently in the process of forming a bullish bottom formation that could be confirmed if BTC posts a bullish response to the $6,500 to $6,600 region.
Bitcoin’s Bears Roar as the Crypto Plunges Below $7,000, But Downwards Movement May Be Fleeting
At the time of writing, Bitcoin is trading down over 3% at its current price of $6,950, which marks a notable decline from its recent highs of $7,500 that were set this past weekend when bulls attempted to drum up some upwards momentum.
The strong rejection at this level is what sparked the downtrend that has led the crypto below $7,000, and a failure for bulls to garner significant strength in the near-term could spell serious trouble for where the crypto trends throughout the first quarter of 2020.
It is important to note that the cryptocurrency’s current price region could provide enough support to catalyze the next rally.
Big Chonis, a popular crypto analyst on Twitter, spoke about this in a recent tweet, explaining that Bitcoin has now reached its confluence support at the lower boundary of a descending wedge, which could mean that it will soon post a strong bounce.
“$BTC – looking for “some” support here at the confluence of the 61.8% retrace and the lower wedge support….#bitcoin,” he said while pointing to the chart seen below.
There is one other potentially bullish technical factor that could help bolster Bitcoin’s price action in the near-term, but it is important that the crypto posts a bullish reaction to the $6,600 in order for a bourgeoning inverse head and shoulders formation to be valid.
Scott Melker, another popular cryptocurrency analyst on Twitter, spoke about this formation in a recent tweet, telling his followers that it is still way too early for this formation to be considered valid, but it does remain a possibility.
“$BTC: Early meme idea, before the crowd. Inverse head and shoulders possible – meaningless unless price stops above the swing low and then breaks the pink line,” he explained.