We originally noted they key resistance around $7800 a couple of weeks ago when Bitcoin (BTC/USD) was rebounding from $7100. The market did indeed stall under $7800, but the choppiness kept the bullish outlook alive towards $8000.
After a few failed attempts to break above $7800, BTC/USD was hanging around $7600. Then, during the 6/10 session, price dipped to $7200, breaking a consolidation support, and signaling a bearish continuation scenario.
Bitcoin 4H Chart
- Price action in the past couple of weeks is resolving into a consolidation period.
- The dip during the 6/10 session suggests that bears are now back in control.
- Note that in the 4H chart, price held under the 200-period simple moving average (SMA). Price actually held under the 100-period and 50-period SMAs for the most part as well.
- The RSI in the time-frame held under 60. This reflected maintenance of the prevailing bearish momentum.
- Now, price is still above the previous low just under $7100, and it looks like we might have some buying here around $7200.
- Because the prevailing trend is bearish and we are in a bearish breakout, I would limit any bullish pullback outlook.
- I would anticipate resistance around $7375, and limit any upside to $7540. This is a wide range for resistance, but bitcoin is volatility so we have to give it "wiggle room".
- If price indeed retreats from this area, the pressure will be on $7100. Below that, we are likely going to break below $7000, with the $6500 level in sight.