The cryptocurrency has exhibited a strong reversal after hitting $9,800 on Monday. As of the time of this article’s writing, BTC trades in the $9,200's.
This reversal to the downside has resulted in the liquidation of dozens of millions of long positions on BitMEX.
With bears seemingly back in control, top analysts are identifying what levels traders should watch moving forward.
Bitcoin Needs to Hold This Level to Maintain Bullish Skew: Analyst
Blockroots founder Josh Rager says that while Bitcoin is still range-bound, the asset is approaching crucial price levels.
The crypto trader explained that if Bitcoin breaks down below ~$9,000, a move to $8,900 then $8,500 will follow:
“BTC’s range is clear. Current support that has been holding the past three weeks is the mid-range Break down here and price likely to see $8900 followed by $8500 range bottom,” Rager wrote, referencing the chart seen below.
Chart of BTC’s price action over recent months by Josh Rager (@Josh_rager on Twitter).
This comment was made in reference to how important $8,500 has been for BTC over the past two months. The level acted as crucial support at two retracements, with Bitcoin bouncing off that level to recover towards $10,000.
Also see: Trading Diary: Bitcoin finally reacts
$8,500 has also been an important level to the bull and bear cases earlier in 2020.
Will It Hold $8,500?
Unfortunately for bulls, not everyone is convinced the cryptocurrency will even hold at that level.
A cryptocurrency analyst recently doubled down on his long-held sentiment that Bitcoin’s recent price action is textbook distribution. Distribution meaning a topping pattern in the chart of an asset.
Referencing the distributive properties of the chart below, he shared on Twitter:
“A couple more clues developing that lend themselves to HTF distribution. 1. Rising Demand on the verge of failing. 2. Side by side, ascent vs descent with selling the dominant pressure from volume. We break to the downside, I’m not interested in $7ks. Much lower.”
Bitcoin distribution analysis by Cold Blooded Shiller (@ColdBloodShill on Twitter).
The on-chain outlook is similarly as bearish.
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Disclaimer. This analysis and forecast are the personal opinions of the author that are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by Cryptosavvy.co.uk. Readers should do their own research before investing funds.