Bitcoin’s consolidation phase has shown no signs of letting up anytime soon, as it has been hovering around $9,400 ever since it was able to rebound from its recent lows of $8,900.
It is important to keep in mind that the cryptocurrency has been forming lower highs over the past several weeks. First it posted a rejection at highs of $10,400. It then rebounded back to $10,050, before later being rejection at $9,600.
This trend indicates that the benchmark digital asset’s buyers are not being driven by underlying strength and could indicate that a break below its range lows of $9,000 are imminent in the days and weeks ahead.
One analyst is noting that he anticipates that crypto to teleport down towards $8,000 in the near-term, not being able to find any significant support above this level.
Other traders are offering even grimmer outlooks, with one pointing to a pattern signaling that Bitcoin may decline as low as $7,000 in the weeks ahead.
Bitcoin’s Technical Strength Degrades as It Hovers Above Key Support
At the time of writing, Bitcoin is trading down roughly 1% at its current price of $9,400.
Although it has not incurred any type of steady downtrend, and dips below $9,000 have all been short-lived, the lack of buyer’s ability to extend the massive momentum it has seen since mid-March is concerning.
There are some other bear-favoring factors that also seem to suggest that downside could be imminent, including the potential triple top that has been formed at $10,500, and the consecutive rejections it has posted at $10,000.
Whether or not these lead it into a downtrend will depend on if bulls are able to defend the lower-$9,000 region.
One analyst spoke about the importance of this newly established support, explaining that a decline beneath it could open the gates for a sharp plunge down to $8,000.
He does not believe that the support in the upper-$8,000 region will slow its descent.
“Primary scenario on BTC still remaining the same and is shared in the chart. Losing $9,150-9,250 and I think we’ll skip $8,800 towards low $8ks,” he said.
This Technical Pattern Signals BTC Could See an Even Deeper Decline
“1D BTC… this e2e would make a lot of ppl upset… not close to triggering yet, but def watching,” he explained while pointing to the pattern seen on the below chart.
It does appear that this possibility would grow in likelihood if buyers push it into the cloud at roughly $8,800.
If this happens, the downside target would sit at just over $7,000.
Featured image from Shutterstock. Charts from TradingView.