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Bitcoin traders are now aiming for $ 6,000

May 22, 2020

Since May 20, the price of Bitcoin (BTC) has dropped by almost 10%This shifted the focus of traders from overcoming the resistance level at $ 10,000 to the all-important support of $ 8,800.

The short-term downward trend intensified after the CoinMarketCap’s leading crypto asset is repeatedly rejected, near the $ 10,000 markThis led to higher lows of $ 9,942, $ 9,905 and $ 9,849.

Weekly price chart for the crypto market

Bitcoin traders are now aiming for $ 6,000
Bitcoin traders are now aiming for $ 6,000

Weekly market price chart for cryptocurrencies. Source: Coin360

Failed to set a higher maximum above these values ​​and The constant loss of momentum dropped the price below the bullish pennant;; The downward movement has intensified in the past two days.

At the moment, Bitcoin’s price continues to find support in the ascending channel trend line, however The force of any rebound from this support begins to decrease and several traders are proposing to return to $ 7,400 to $ 6,500 as support wanes from $ 8,800 to $ 8,575.

BTC USDT daily chart

Daily BTC USDT chart. Source: TradingView

As shown in the daily timeframe, the price is currently set between two high-volume VPVR nodes in the range of $ 9,100 to $ 8,575. Although the price has dropped below the 20-day moving average for the first time in nine days, Bitcoin remains above the 100 and 200 day moving average, both of which are close to $ 8,000.

Traders who choose the Bollinger Band indicator will find that the price has fallen below the moving average of the indicator. As selling pressure increases, a drop to the lower band of $ 8,460 is increasingly likely..

In Aprilif the price was trading below $ 8,000, Many analysts predicted that $ 8,000 would be tremendous resistance to overcome. But, as readers will recall, Bitcoin has broken through this level slightly, which means that the price could break this level even during a sharp bearish move.

Should further downward moves be made, traders could rethink the idea of ​​considering the 100 and 200 MA at $ 8,000 as a strong support level.. Given the VPVR volume gap around this price, a correction to $ 7,400 seems more likely.

A drop below $ 7,400 is not a curtain on Bitcoin’s price

BTC USDT 1 week chart

One week BTC USDT chart. Source: TradingView

Meanwhile, Some traders are already targeting the $ 6,400 zone, leading the formation of an inverted head-shoulder-shoulder pattern in the weekly time frame. A drop in high volume VPVR nodes at $ 7,057 to $ 6,385 would complete the right shoulder, and eventual pressure across the neckline at $ 9,800 would lead traders to $ 14,000 as a result of completing the pattern.

Such a move would exceed the 2019 high of $ 13,950, causing the price of Bitcoin to rise and reach a new all-time high.. This would take a while and it’s hard to predict how things will turn out, as the price can be: fill in the snippet and jump up, roll over a long period of consolidation, or climb to $ 10,000 just to get around Resisting the long-term downtrend line again.

That means there is something to consider and to observe.

The future

BTC USDT 4 hour chart

4-hour BTC-USDT chart. Source: TradingView

Currently, The 4 hour period shows that the Bitcoin price is just oversold The MACD histogram has also turned light pink, but both the signal line and the MACD protrude further down and do not appear to be ready to cross.

Although playing oversold rebounds on the ascending channel trend line has been a profitable strategy since April 16, The current price movement has not broken the pattern of lower highs and lows, and the reaction of the buying volume is less than satisfactory.

Traders who are risk averse might see a 4 hour candle close at $ 9,250 or even wait for the digital asset to close above 20 MA at $ 9,500 on the 4 hour chart. This would bring the price back above the Bollinger Band moving average and an important support / resistance level.

Traders looking to take short positions will be looking for a drop below $ 8,550. and an increase in declining momentum below the 200-day moving average with the goal of hitting $ 7,400 and $ 6,500.

According to the current state of affairs Bitcoin’s price remains in an upward trend until the price closes below the ascending channel.

The views and opinions expressed here are solely those of author and do not necessarily reflect Cointelegraph’s views. Every investment and every trade step involves risks. You have to do your own research when making a decision.