One top analyst is now noting that Bitcoin is trading just a hair below a key resistance level that has been suppressing its price action throughout the past day.
If the benchmark cryptocurrency fails to close above this level today, the crypto could be positioned to see a significant selloff that leads it back into the $8,000 region.
Bitcoin Stable Around $9,000 But Struggles to Gain Momentum
At the time of writing, Bitcoin is trading down marginally at its current price of $9,070, which marks a slight decline from daily highs of $9,150 that were set earlier this morning.
Today’s sideways trading marks an extension of that which was first incurred yesterday following the cryptocurrency’s breakout from its prolonged consolidation phase around $8,700.
Unfortunately for buyers, this breakout rally has been rather weak, and the lack of follow through seems to elucidate some underlying weakness that could mean further downside is imminent.
Bitcoin’s recent decline from its recent highs of $9,200 has done some damage to its market structure, as one prominent cryptocurrency analyst is now noting that he is watching for BTC to confirm a potentially bearish “tweezer top” formation that it has been forming on its daily chart.
Big Cheds, a popular cryptocurrency analyst on Twitter, spoke about this possibility in a recent tweet while referencing a chart showing the emerging formation.
“Bitcoin daily – On watch for a potential tweezer top after rallying from $8400,” he noted.
$BTC #Bitcoin daily – On watch for a potential tweezer top after rallying from $8400 pic.twitter.com/J6JYOIPRAz
— Big Cheds (@BigCheds) March 6, 2020
Here’s the Key Level BTC Needs to Close Above to Avoid Significant Downside
If Bitcoin’s bulls want to invalidate the hints of bearishness that it has been expressing, it is imperative that they push it above $9,150.
Crypto Michaël, a popular cryptocurrency analyst and former full-time trader at the Amsterdam Stock Exchange, explained that without a sustained close above this level, he believes BTC could retrace towards $8,900 before finding any significant support.
“Bitcoin: This one is looking the same as earlier today. Not closing above $9,150 yet. Might retest the $8,925-8,950 support area again, which I’d be seeking for longs. Main target zone then $9,300-9,400,” he explained while pointing to the chart seen below.
This one is looking the same as earlier today.
Not closing above $9,150 yet.
Might retest the $8,925-8,950 support area again, which I’d be seeking for longs.
Main target zone then $9,300-9,400. pic.twitter.com/donkifwrkf
— Crypto Michaël (@CryptoMichNL) March 6, 2020
Today’s upcoming daily close should offer valuable insights into where Bitcoin and the aggregated markets are heading next, as a surge past $9,150 would suggest further upside is imminent, whereas a rejection here could mean further downside is imminent.
Featured image from Shutterstock.