Bitcoin’s ongoing downtrend was further extended today after bears pushed the cryptocurrency below a key support level that had been holding strong for the past few weeks, leading many analysts and investors alike to fear that further losses are imminent for the cryptocurrency.
Bulls have been able to defend from further losses, as its downtrend halted around $6,800. The support that Bitcoin has found in the upper-$6,000 region has led some analysts to predict that a relief rally is imminent, but it is important to note that the mid-term outlook for BTC still remains quite gloomy.
Bitcoin Drop Halts at $6,800, is a Relief Rally Inbound?
At the time of writing, Bitcoin is trading down just under 3% at its current price of $6,900, which marks a slight climb from its daily lows of $6,800 that were set earlier this morning.
Bitcoin’s ability to find support at $6,800 was surprising to some analysts, as most had previously believed that a dip below $7,000 would open the gates for a sharp and rapid movement downwards.
Because of the support at $6,800 and ongoing bout of sideways trading, analysts are widely noting that BTC may be poised for a decent sized relief rally.
Mayne, a popular cryptocurrency analyst on Twitter, concisely noted in a recent tweet that he believes the crypto “could see a relief bounce from this area,” adding that it may be invalidated if the crypto drops below $6,500.
HornHairs, another popular crypto trader and analyst, concurred with Mayne’s assessment, noting that he is eyeing a movement up to Bitcoin’s CME futures gap at $7,200 in the near-term.
In spite of the potential short-term bullishness that Bitcoin may incur as it holds above its key support level at $6,800, it is important to note that the market structure on larger time frames remains firmly bearish for the embattled cryptocurrency.
One popular cryptocurrency trader named TraderXO recently spoke about this potential bearishness, explaining that BTC could soon see a potential “selling climax” phase that leads it significantly lower, with a mid-term target set within the $5,000 region.
“$BTC – And so it begins… Almost confirms what I believed to be preliminary support. The only question is… will we see the phase of ‘selling climax’ (SC) & how deep does it drop… I’m personally under the impression this could drop to the 200 weekly MA,” he said.
The coming hours and days will provide significant insight into just how critical $6,800 is for the cryptocurrency.