Technical Analysis and Market Entry: Bitcoin Bears are Gunning for the Psychological $5000 mark
- Bitcoin price has been smashed out of critical supporting range, leaving the door open to further downside pressure.
- BTC/USD price action reached a critical pennant structure, with a retest now eyed.
BTC/USD Recent Price Behaviour
The Bitcoin price is back to moving within consolidation mode, following the bears breaking critical support smashing below the $8000 territory. There was a very narrow trading range, which was seen at a high of $8800, with a low down at $7800. The price was moving within this since 25 September, after a deep fall that came into play 23 September.
BTC/USD, as mentioned above, was ranging for some four weeks, before the breach came into play. During the time, price action had formed a bearish pennant structure, which has been capitalized on by the bears. Bitcoin has been forced to its lowest levels in around five months, given the fresh wave of selling pressure.
A big area of demand is now in action, which runs from around $7800 down to $7200. It is a zone that well-served Bitcoin back in May, finding decent buying momentum. The price went on to produce heights of $13000 not long after in June. Profit-taking quickly kicked into gear up at these dizzying level, which forced choppy trading and then an eventual bearish trend.
Big Pennant Retest
As earlier described, Bitcoin was moving within a bearish pennant structure, which was a victim to a breakout south. Technically, given the breach via the daily, eyes are now on a retest of the pennant. Should the price be met by rejection, then another wave of selling pressure could very likely follow.
The resistance at present is tracking around $8000, which is where the lower trend line can be observed of the pennant. Given the psychological aspect of the round figure, this could be an additional confluence of a likely barrier.
Bias is tilted towards further moves south, given the recent exposure of a critical acting area of support. In terms of targets; $6200 and then $5000 would be of interest, the ideal entry will be upon a retest of the pennant around $8000. Stops to be placed above the structure at $8900, leaving enough breathing room in case of any short-lived spikes higher.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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