Bitcoin price has been on an absolute tear over the last 24 hours, rallying from lows around $8,000 to as high now as $8700, giving bullish crypto traders confidence that a near-term bottom is in, and more upside could be in the days ahead.
However, before bulls could celebrate a clean break of downtrend resistance, the number one cryptocurrency by market cap has been rejected at $8,700, potentially putting an end to the early January 2020 rally. But if Bitcoin can reclaim such an important level of resistance as support, the downtrend could be concluded and another, extended rally could follow.
Rejected: Bitcoin Struggling to Break Through Resistance at $8,700
Bitcoin is at a very important moment in its young history. The cryptocurrency took off in early 2019 on a parabolic rally that eventually formed an “echo bubble” fractal, topping out at $14,000 just shy of the crypto asset retesting its former all-time high.
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After the rejection at that price level in late June, the leading cryptocurrency by market cap has fallen deep into a downtrend that eliminated over 50% of the asset’s value. The downtrend has now gone on for over six months, but may have ended with the formation of an inverse head and shoulders around recent local lows near $6,500 – a level said to be the “miner’s bottom,” or the point where Bitcoin mining breaks even with operational expenditures.
However, bulls aren’t in the clear and need to reclaim well above $8,700 through $9,100 as resistance turned support before the downtrend can be considered concluded. As of right now, Bitcoin price is still making an attempt to breach above $8,700, but a rejection is in the works.
The cryptocurrency may have formed a rising wedge pattern, a technical analysis formation that tends to reverse and break downwards. Commonly used indicators are also signaling that the rally may be coming to an end, as both the Relative Strength Index and MACD are showing overbought levels on daily timeframes, just as Bitcoin meets its most important resistance yet, dating back to the parabolic rally in mid-2019.
Ready for Bull? Downtrend May Be Over For Crypto Market
On the bullish side, Bitcoin price has broken out of the downtrend resistance trendline but will need to close above on the daily for a candle to close outside the resistance. If the daily candle closes within the trendline, it could be a false breakout and fakeout upward before more downside in the future.
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Clearly, though, these levels are extremely important for Bitcoin, and whatever happens at current prices could shape the near-term future of the crypto market as a whole.