Bitcoin Price Key Highlights
Bitcoin price has been on a tear lately but appears to be hitting a strong upside roadblock around $8,000.This is around the top of its descending channel visible on the 4-hour and daily time frames.If the resistance holds, the Fib extension tool shows the next potential downside targets.
Bitcoin price appears to be encountering some bearish pressure at current levels and might be forced to retreat from its climb.
Technical Indicators Signals
The 100 SMA is below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, there’s still a stronger chance for the selloff to resume than to reverse. The 200 SMA also coincides with the descending channel top, adding to its strength as a ceiling.
Also, this area is in line with the 61.8% retracement on the latest slide, so there’s a good chance that sellers may be waiting right here. RSI is already indicating overbought conditions and looking ready to turn south, reflecting a return in selling pressure. Similarly stochastic has just reached overbought levels to signal exhaustion among buyers and a possible pickup in bearish pressure.
In that case, Bitcoin price could fall back to the nearby support areas marked by the Fib extension tool. The 38.2% level lines up with the mid-channel area of interest near the $7,000 mark. The 50% and 61.8% levels are near the $6,000 major psychological level and previous lows. Stronger selling pressure could take Bitcoin price to the 78.6% extension close to $5,000 or the full extension at $4,080.40.
A break past the key area of interest, on the other hand, could pave the way for a climb to the next major inflection point at $10,000 or the swing high. Strong bullish pressure past this level could lead Bitcoin price to test the $12,000 level next.
However, bullish catalysts appear to be running out so traders are waiting for another set of positive developments to sustain the climb. In the absence of these, Bitcoin price could retreat as short-term traders or those who hopped in on FOMO book profits.