in , ,

3 Hurdles Could Complicate Bitcoin’s Price Recovery

3 Hurdles Could Complicate Bitcoin’s Price Recovery

Forcing a bitcoin (BTC) price breakout is looking anything but easy for the bulls, with the path to $7,400 being littered with resistance levels.

Stepping back, the leading cryptocurrency jumped above $6,800 on Monday, neutralizing the bearish view put forward by a downside break of a trendline support last Friday.

The sharp recovery from lows below $6,200 also adds credence to the argument that BTC has likely charted a long-term bottom around the 21-day exponential moving average (EMA). Moreover, the repeated defense of the area around $6,000 indicates sellers exhaustion. Hence, the stage looks set for a strong move to the upside.

However, securing a bearish-to-bullish trend change above $7,402 (Sept. 4 high) is going to be a tough task as BTC could encounter stiff resistance at following technical levels:

Trendline falling from July highs

BTC clocked a high of $6,810 on Monday, but closed (as per UTC) at $6,440, keeping intact the resistance of the trendline drawn between the July 25 and Sept. 5 highs.

At press time, the cryptocurrency is trading around the trendline resistance of $6,430 on Coinbase. A high-volume close above that level would open the doors to the next resistance level lined up above $6,800.

Horizontal line from Sept. 22 high of $6,823

BTC’s failure to hold above $6,823 on Monday has established that level as a key near-term resistance. In any case, it is a key horizontal hurdle, as seen in the chart above.

It is worth noting that horizontal resistance or support levels (major high or low) carry more importance in technical analysis than trendlines, whose connecting points may differ from person to person.

Trendline from March highs

The trendline connecting March highs and July highs is currently located at $7,020 and could cap upside.

The longer the duration of the trendline, the more validity is attached to the support or resistance level it represents.

Hence, the prospects of a bull breakout above $7,400 would rise sharply if BTC manages to clear this eight-month-long falling trendline on the back of strong volumes.

View

  • BTC seems to have carved out a bottom around the 21-day EMA, although a bullish breakout is $1,000 away.
  • A break above the trendline sloping downwards from March highs could be considered an early sign of impending bullish reversal above $7,402 (Sept. 4 high).
  • On the downside, the 21-month EMA of $6,123 is the level to beat for the bears.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View 

Join 10,000+ traders who come to us to be their eyes on the charts and sign up for Markets Daily, sent Monday-Friday. By signing up, you agree to our terms & conditions and privacy policy

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

https://www.coindesk.com/these-three-hurdles-could-complicate-bitcoins-price-recovery/

Leave a Reply

Your email address will not be published. Required fields are marked *

Rwanda Starts Tracking Conflict Metal Tantalum With Blockchain

Rwanda Starts Tracking Conflict Metal Tantalum With Blockchain

Qtum Blockchain Becomes Amazon Web Services Partner in China

Qtum Blockchain Becomes Amazon Web Services Partner in China