Bitcoin price tests critical resistance in an effort to overcome the level, with one analyst saying that failing to do so will likely result in a pullback. Nevertheless, breaking resistance would make the bearish outlook invalid.
At the time of writing, Bitcoin is trading at $78,694, down 0.75% over the last 24 hours. The cryptocurrency has recorded approximately $67.55 billion in daily trading volume, while its market capitalization stands near $1.57 trillion.
This latest move follows Bitcoin’s rejection near $81,300, which has been deemed significant in determining whether this recent recovery is likely to gain traction or not.
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Bitcoin Price Rejected Near $81.3K
On August 26, a crypto analyst, Crypto Patel, highlighted the rejection of Bitcoin at $81,300, following his previous observation regarding the presence of a significant bearish daily order cluster in the $80,000 to $83,000 range.
The other aspect mentioned by Crypto Patel is that Bitcoin price formed an inverted hammer pattern on its daily chart. The formation can be considered a potential reversal indication if it comes after a bullish price move.
According to the technical analysis, for Bitcoin to emerge from the bearish setup, it has to rise above $83,000 and have a higher time frame close above the mentioned price level.
If Bitcoin fails to rise above the range of $80,000 to $83,000, there could be an expectation of increased selling pressure in the market.
The biggest drawback for Crypto Patel at the moment is the level of around $50,000 to $55,000. But it still needs to be considered only as a technical situation.
Thus, the level of $83,000 is seen as an important decision-making level for the moment. A strong breakout above that will negate the bearish case and make us rethink the downside potential.
Bitcoin Price Technical Indicators Show Mixed Signals
Even with the rejection seen here, the technical picture surrounding Bitcoin is not necessarily bearish.
BTC is trading near the top Bollinger Band, which is at $81,886. The middle band is trading near $68,911, while the bottom band is at $55,936.
Being near the top band typically implies that the price has managed to hold up strong upward pressure. However, it may suggest that Bitcoin is getting to the level where there could be some form of resistance.
Additionally, the MACD indicator is indicating positive momentum as well. The MACD line stands at 3,891.63 while the signal line is at 2,506.33. Moreover, the histogram is still positive, and it is at 1,385.29.
However, the strength of this momentum will be tested should Bitcoin struggle to trade above the $80,000 level.
What Could Happen Next
The key move in the Bitcoin price in the coming periods will be determined by its ability to gain strength above the $81,000 level and then challenge the $83,000 level.
If a strong daily or even higher time frame close above $83,000 happens, it would make the prevailing bearish bias lose some credibility.
But any other failure and subsequent breakdown of the nearby support may increase the probability of a further correction, with investors’ attention initially focused on the $68,000-$69,000 area.
Technical targets must also be distinguished from actual results. “The $50,000-$55,000 price range represents our analyst estimate based on the current chart pattern” is not an assured price target for Bitcoin.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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