Bitcoin’s volatility has once again kicked off after a brief period of consolidation around $7,500, as the cryptocurrency surged up to its near-term resistance level today before facing a nearly instant rejection that sent it reeling down to $7,400.
This volatility has, in the eyes of analysts, confirmed that Bitcoin’s range highs are in fact a strong level of resistance for the cryptocurrency, and may signal that BTC will see further downside in the near-term.
Bitcoin Inches Lower After Fleeting Pump; Analysts Target $7,000
At the time of writing, Bitcoin is trading down just over 1% at its current price of $7,450, which marks a notable drop from its daily highs of nearly $7,700 that were set during a fleeting pump earlier today.
This movement confirms the long-held belief amongst analysts that the $7,600 to $7,800 region was an incredibly strong resistance area for BTC, which was first established last week when BTC pumped from lows of $7,000 to highs of $7,800 before quickly retracing and erasing nearly all of these gains.
This move also pointed to the possibility that Bitcoin’s bulls are fundamentally weak at the moment, which was further confirmed by today’s fleeting price pump.
“$BTC #Bitcoin 1 hour – Lots of shenanigans,” Big Cheds, a popular cryptocurrency analyst on Twitter explained while pointing to the massive upwards wick seen in the chart below.
$BTC #Bitcoin 1 hour – Lots of shenanigans pic.twitter.com/KDfIBNVIsv
— Cheds (@BigCheds) December 9, 2019
Because this wick marks a confirmation of the resistance at the upper boundary of Bitcoin’s current trading range, it is a strong possibility that it will visit its range lows that currently exist around $7,000.
UB, another popular cryptocurrency analyst on Twitter, spoke about this in a recent tweet, telling his followers that he anticipates Bitcoin to retest its range lows in the near-term.
“$BTC – I believe that was the top for now. Over the next few days I’d like to see a retest of the Range Lows. My short term bearish argument is invalid if the Range High is established as Support,” he explained while pointing to the chart seen below.
$BTC – I believe that was the top for now.
Over the next few days I'd like to see a retest of the Range Lows.
My short term bearish argument is invalid if the Range High is established as Support. #Bitcoin pic.twitter.com/hEDLjU3WO1
— UB (@CryptoUB) December 9, 2019
If Bitcoin’s bears begin gaining firm control over the cryptocurrency, it is highly probable that it won’t find too much support until it drops to its range lows around $7,000, with a break below this key support potentially leading it to drop back towards its recent lows of $6,500.