Following the failure to hold gains over the $9,500, Bitcoin (BTC) is currently experiencing a sharp price collapse towards the $9,200 level. No wonder why the leading crypto asset is at risk of a potential downtrend, especially if it fails to bounce back from the support zone of $9,150.
Bitcoin’s Wider Bearish Correction
On Tuesday, Bitcoin recorded a weekly low at $9,200 due to a potential $37 million dump. This decline occurs as a wider bearish correction. That’s after tremendous price rally of BTC during the first month of 2020.
As every crypto enthusiast remembers, Bitcoin interestingly surged higher in January 2020 because of macroeconomic and geopolitical events, from the conflict between the US and Iran to Coronavirus outbreak in China.
On the other hand, Bitcoin failed to break the key resistance close to the $9,500 mark. This momentum signals that a deep pullback in the next trading sessions is possible. Not only that, a number of traders are currently expecting for a potential massive BTC dump.
BTC’s New Weekly Low
Despite the breakout over the $9,600 level and even a test to a fresh 2020 high of $9,606, BTC’s price experienced a sharp near-term spike over the $9,500 hurdle. Besides, the price collapsed and broker below the support level of $9,400 and 100-hour SMA.
Furthermore, Bitcoin’s price further plunged below the level of $9,300 before it tested the support level of $9,200. Currently, the crypto asset is consolidating over the $9,200 and $9,220 support zones.
The immediate resistance of Bitcoin is near the $9,320 level, while the 23.3% Fib retracement degree from $9,606 high to $9,223 low is also near the $9,320. Above all, a falling channel with a barrier near the $9,320 level is forming on the 1-hour BTC/USD chart.
However, crypto analysts found a number of supports near the $9,200 level. In the case that the price falls under the support levels of $9,200 and $9,150, then Bitcoin is at risk of a breakdown. Once it experienced a breakdown, the price can possibly return to the support level of $9,000. Below that level, BTC’s next major support will be near the $8,800 level.
In the case that the bulls plan to prevent that dip, the bulls have to break the price over the $9,300 level as well as the channel resistance. If successful, the next target will be near the $9,420 level.
A $9,420 level will coincide with the 50$ Fib retracement degree from $9,606 high to $9,223 low. If there will be a successful breakout over the $9,420 level and 100-hour SMA, then there is a big chance that the upside will continue over the level of $9,500 and $9,600 in the short term.
According to some analysts, the BTC/USD pair will continue the consolidation stage until it reaches the wedge support. A break above that support will result to a close near the $10,000 level. If not, the price will decline to as low as $7,000.