It appears that the Bulls are losing strength as downward pressure places a cap at $8,200 and price is losing upward momentum. This comes after failing to post another local high and facing a lower rejection after correcting to the downside. However, upside potential cannot be ruled out just yet if the Bulls can maintain support above $8,000 and prevent the price from breaking below $7,750 as the last line of defense.
In the event of further correction downwards, it is critical for the Bulls to get a bounce at $7,775-$7,950. However, a break below $8,000 will likely act as a green light for the Bears to apply significant downward pressure. A break below $7,670 at the 1.618 would confirm that the Bears have taken control and will likely result in a significant break in price.
There are key points to be drawn from stronger time frames as well. Specifically, the weekly chart seems to support a view as we are on top of the 21 . Throughout this downtrend, this has been a breaking point for Bitcoin and has consistently resulted in a break to the downside. Conversely, a strong move above this could give the Bulls the break they need in order to recover the upside momentum. Another point of significance lies on the 4 hour chart using the . During the last significant spike to $10,000 on October 25th, Bitcoin extended into overbought territory before pullback at 76.52. On January 7th, Bitcoin extended into overbought territory before pullback at 81.51, at the price of $8,416. Meaning it took more buying pressure to break $8,000 than to break $10,000. Which is another very indication. Also on the 4 hour, although we still may be in a corrective phase, the failure to post another higher high after pullback should also raise concern for the perspective. While past performance is not an indication for future results, there are several indications on stronger time frames that bolster the case at this point that should not be taken lightly. There is still potential for the Bulls to show their dominance here, but as long as lower highs continue, the Bears will continue to have the upper hand.
Published at Mon, 13 Jan 2020 08:42:11 +0000