Technical indicators estimate that Bitcoin may drop below $9,000 ๐จ This article is 5 years old...
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Technical indicators estimate that Bitcoin may drop below $9,000
3 min read
Updated: Jan. 28, 2020 at 2:09 pm UTC
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Bitcoin is once again testing the $9,000 resistance level. As the flagship cryptocurrency attempts to break above this significant price hurdle, several technical indicators are turning bearish estimating that a retracement could be underway.
Bitcoin could fail to break above resistance
Over the last three days, Bitcoin surged over 10 percent from a low of $8,300 to a high of $9,150. The bullish impulse was able to take the pioneer cryptocurrency above the 200-day moving average, which is a positive sign. Turning this significant resistance level into support is considered as one of the strongest signals that BTC is about to enter a major bull rally, based on historical data.
The last time Bitcoin moved above the 200-day moving average was in Apr. 2, 2019. After breaking above this price hurdle, investors appeared to have entered a FOMO (fear-of-missing-out) stage pushing this crypto up over 180 percent. BTC went from trading at $4,900 to nearly $14,000 on June 26, 2019.
Despite the importance of the 200-day moving average, several technical patterns estimate that Bitcoin could be bound for a correction before it finally enters a new uptrend.
A bearish divergence is forming on BTCโs 1-day chart. This technical pattern develops when the price of an asset appears to be reaching higher highs while the Relative Strength Index (RSI) is making lower lows. Although this bearish formation does not provide a precise selling point, it is a sign that the bulls are losing control of the price action.
Additionally, the TD sequential indicator presented sell signal in the form of a green nine candlestick on BTCโs 6-hour chart and it could also show the same pattern on the 4-hour chart. This technical index estimates that a spike in sell orders could trigger a one to four candlesticks correction or the beginning of a new bearish countdown. A red two candlestick trading below a preceding red one candle could confirm the pessimistic scenario.
If Bitcoin is indeed bound for a pullback, it could plunge to look for support around the 78.6 percent Fibonacci retracement level that sits at $8,700. Breaking below this barrier could push the price of BTC further down to the 61.8 percent Fibonacci retracement level at $8,300.
It is worth noting that an increase in demand for the flagship cryptocurrency could jeopardize the bearish outlook. If Bitcoin is able to close above the recent high of $9,170, then it could continue climbing up to reach the next level of resistance given by the 127.2 percent Fibonacci retracement level. This resistance level sits at $9,800.
Moving forward
Some of the most prominent analysts in the cryptocurrency industry have laid out their bullish perspectives for Bitcoin. According to 45-years trading veteran Peter Brandt, for instance, the flagship cryptocurrency could surge to $21,400. Brandt believes that such a bullish scenario is possible if the upper boundary of a descending parallel channel, the 18-day moving average, and the 3-day trailing stop rule are able to hold. However, if these support levels break, then Brandt expects that a โmore serious correctionโ could take place.
Based on the previous technical analysis, it seems like Bitcoin is about to retest the support levels that Brandt described. The strength of this barrier could determine whether BTC will resume its uptrend or go through a steeper decline.
Bitcoin Market Data
At the time of press 2:09 pm UTC on Jan. 28, 2020, Bitcoin is ranked #1 by market cap and the price is up 3.77% over the past 24 hours. Bitcoin has a market capitalization of $165.05 billion with a 24-hour trading volume of $32.11 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 2:09 pm UTC on Jan. 28, 2020, the total crypto market is valued at at $249.86 billion with a 24-hour volume of $116.01 billion. Bitcoin dominance is currently at 66.04%. Learn more about the crypto market ›
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Peter Brandtย entered the commodity trading business in 1976 with ContiCommodity Services, a division of Continental Grain Company.
