Bitcoin Just Reversed and $8,400 Is Imminent, Here’s Why

Bitcoin failed to continue above the $9,200 resistance and it is down more than 4% against the US Dollar. BTC is now trading in a bearish zone and it could slide further below $8,700.

• After forming a short term top near $9,211, bitcoin price declined sharply below $8,880.
• The price is now trading well below $9,000 and the 100 simple moving average (4-hours).
• There is a crucial bearish trend line forming with resistance near $9,122 on the 4-hours chart of the BTC/USD pair (data feed from Kraken).
• The pair is likely to extend its decline below the $8,700 and $8,600 levels in the near term.

Bitcoin Turns Bearish Again

This past week, bitcoin started a steady rise above the $8,700 and $8,880 resistance levels against the US Dollar. BTC price gained traction and it even managed to climb above the key $9,000 resistance.

However, the bulls faced a strong resistance near the $9,200 area and the 100 simple moving average (4-hours). There is also a crucial bearish trend line forming with resistance near $9,122 on the 4-hours of the BTC/USD pair.

It seems like bitcoin failed to clear the trend line, $9,200, and the 100 SMA. As a result, there was a sharp decline below the $9,000 support level. The price is down around 4% and it even declined below the 50% Fib retracement level of the upward move from the $8,402 low to $9,212 high. It is now trading below the $8,800 level and testing the 61.8% Fib retracement level of the upward move from the $8,402 low to $9,212 high.

If the bulls fail to protect the $8,700 support level, there is a risk of another decline. An initial support is near the $8,600 level, below which there is a risk of a drop towards the $8,400 support area.

Upside Correction

If the $8,700 support remains intact, bitcoin price might correct higher above $8,800. An initial resistance on the upside is near the $8,950 level, above which the bulls could aim a break above the trend line. If there is a clear break above the trend line and the $9,200 resistance, the price might start a strong rally towards the $9,500 and $9,800 levels in the near term. Overall, the trend is now negative and the price might slide further towards $8,400. Technical indicators 4 hours MACD – The MACD for BTC/USD is now gaining pace in the bearish zone. 4 hours RSI (Relative Strength Index) – The RSI for BTC/USD is now well below the 50 level. Major Support Level – $8,800 Major Resistance Level – $9,200