Bitcoin is once again in the bearish hot seat. It failed to push above the resistance at $87,470, an important Fibonacci level imposed by a descending channel. This rejection would indicate a likely retest and furthering of the current downtrend, with investors still cautious of more downside price action.
Technical Indicators Signal Caution
Another bearish pattern, a “dark cloud cover” pattern, has formed to double down on the bearish bias. Finally, a very large green candle emerges, indicating bullish momentum. Next, a red candle opens above the green candle’s body and closes under the midpoint of the green candle’s body, confirming a move to bearish sentiment.
Bitcoin recovered 14% from a four-month low around $76,600 seen on March 11. Still, it remains roughly 25% under its all-time peak of $110,000. This decline is what’s called a typical “bull market correction.” Nonetheless, with buying pressure unable to hold below the $87,470 level, it can warrant the temporary nature of this downside potential.
Key Levels to Watch
Finally, Bitcoin’s failure to close decisively above the $90,000-$93,000 resistance zone level of late suggests that there isn’t a great deal of buying conviction presently. The multiple tests of the $87,470 area as support, followed by V-shaped recoveries in March, makes this level of acute emotional importance. By not reclaiming this supply, increasing drop becomes much more likely. We might witness prices dropping towards deeper support levels in the range of $77,000-$79,000.
Bear Flag Formation
As of writing, Bitcoin is still following a potentially bearish flag pattern where $84,000 is acting as lower trendline support. The cryptocurrency’s latest attempt to break past the short-term supply zone, in red, failed miserably and reestablished the supply zone as hard resistance.
Should Bitcoin break below the $77,000-$79,000 region, analysts predict a potential descent toward the $65,000-$74,000 area, a larger green liquidity zone. Traders and investors alike should keep a watchful eye on these levels of interest to pounce with their next big buy or sell.
