Bitcoin Forming Double Top And It’s Vulnerable Below $8,500

Bitcoin struggled to break the $8,900 resistance on two occasions against the US Dollar. BTC price is showing a few bearish signs and it seems like it could decline towards $8,300 or $8,200.

• Bitcoin price is likely forming a double top pattern near the $8,900 resistance against the US Dollar.
• The price is down 3% and it is now trading below the $8,700 support.
• There was a break below a key bullish trend line with support near $8,660 on the hourly chart of the BTC/USD pair (data feed from Kraken).
• The pair seems to be vulnerable and it could break the $8,500 support in the near term.

Bitcoin Could Correct Towards $8,200

Yesterday, bitcoin extended its rally above the $8,500 resistance against the US Dollar. BTC price climbed towards $9,000, but it struggled to clear the $8,900 resistance area.

The bulls made two attempts to surpass the $8,900 resistance area, but they failed. As a result, there was a bearish reaction below the $8,700 and $8,660 support levels. Moreover, there was a break below a key bullish trend line with support near $8,660 on the hourly of the BTC/USD pair. It is now trading below the 23.6% Fib retracement level of the upward move from the $8,040 swing low to $8,898 high.

An immediate support is another bullish trend line at $8,610 on the same chart. The first key support is near the $8,540 level (the previous breakout zone). If the price breaks the $8,540 support, it will most likely carve a double top near the $8,900 area.

In the mentioned bearish case, bitcoin price is likely to slide below the 50% Fib retracement level of the upward move from the $8,040 swing low to $8,898 high. The main target for the bears may perhaps be near the $8,240 and $8,200 support levels (double top target levels). Any further losses could lead BTC price towards $8,000.

What If BTC Stays Above $8,540?

If BTC stays above the neckline support at $8,540 and $8,500, it would invalidate the double top pattern. On the upside, an initial resistance is near the $8,700. The key hurdle for bitcoin is near $8,900, above which the bulls are likely to target the next important hurdle near the $9,200 and $9,250 levels. Technical indicators: Hourly MACD – The MACD is now gaining momentum in the bearish zone. Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now below 50 and it is showing a few bearish signs. Major Support Levels – $8,610 followed by $8,500. Major Resistance Levels – $8,700, $8,900 and $9,000.