As we predicted, bitcoin (btc/usd) was going to face a key resistance around $8400. We also anticipated price to come down and test the $8000 area as support. Indeed, after price tagged $8400 it stalled and then fell to $8000, where is has since been whipping around.
BTC/USD 4H Chart
- The 4H chart shows that price is essentially forming a head and shoulders pattern under $8400, with a neckline around $7920.
- A break below $7900 therefore could send price down towards the $7335-$7525 area, which is a support/resistance pivot area.
- This is going to be likely a wide sticky area, instead of a specific support pivot. I would expect price to consolidate here, and think we should wait until price action shows us what the key support/resistance will be. I would be surprised if price comes down to $7200 before finding support.
- But if price does not find support at $7200, I would not rely on support until $6450-$6500 area. And even then, I would only anticipate a short-term bounce and would want to monitor the reaction here further before determining if price will likely bottom of fall further.
- At this point, things look bearish for bitcoin in the short to medium term.
- BUT if price manages to hold above $7900 and pushes above $8200 (around where the shoulders area), then the pressure will be back at the $8400-$8420 area.