Bitcoin Price Breakdown Risk Grows As Bears Aim For $85K

Overview

Bitcoin has recently experienced a notable decline, dropping below the $88,500 mark. As it attempts to recover, the cryptocurrency faces significant resistance and critical support levels that could determine its next movement.

Bitcoin Price Movement

Bitcoin price has extended its losses, trading below $88,500. This decline followed the failure to maintain a position above the $89,000 support. The price sharply fell below both the $88,500 and $87,000 support levels, with bears pushing it even lower to below $86,500. A low was recorded at $86,007, but Bitcoin is currently making an attempt to initiate a recovery wave.

As of now, Bitcoin is trading below the $88,200 level and the 100 hourly Simple Moving Average. A new bearish trend line is forming with resistance positioned at $88,000 on the hourly chart of the BTC/USD pair. For a potential recovery, Bitcoin would need to settle above the $86,200 and $86,000 levels.

Bitcoin did experience a minor recovery wave from the $86,000 level, with a move above the 23.6% Fibonacci retracement level of the downward movement from the $91,099 swing high to the low of $86,007. However, immediate resistance remains near the $88,000 level, while the first key resistance is close to the $88,500 mark, which aligns with the 50% Fibonacci retracement level of the same downward move.

If Bitcoin can manage to close above the $88,500 resistance, it may further increase in value, potentially testing the $89,200 resistance level. Continued gains could lead to a rise towards the $90,000 level, with further barriers at $91,000 and $91,500.

Conversely, if Bitcoin fails to rise above the $88,500 resistance zone, it risks starting another decline. Immediate support is identified near the $86,700 level, followed by significant support at the $86,200 level. The next major support zone is around $85,500, and any further losses could push the price towards the $83,500 support in the near term. The main support level is set at $82,500, beneath which Bitcoin could struggle to recover in the near term.

Technical indicators suggest that the hourly MACD is losing momentum in the bearish zone, while the hourly Relative Strength Index (RSI) for BTC/USD is currently below the 50 level, indicating bearish sentiment.

From author

The current state of Bitcoin’s price movement reflects a critical juncture for the cryptocurrency. The struggle to maintain support levels, combined with the formation of a bearish trend line and resistance, indicates that traders and investors should remain vigilant. The price action is likely to be influenced by both technical indicators and market sentiment.

Impact on the crypto market

• Bitcoin’s failure to maintain key support levels could lead to increased bearish sentiment across the market.
• A potential recovery above the $88,500 resistance could instill confidence among traders, possibly leading to upward momentum.
• The formation of bearish trend lines may signal caution for investors, prompting them to reassess their positions.
• The established support levels will be critical for maintaining market stability; breaches could trigger further selling.
• Overall market volatility may increase as traders react to Bitcoin’s price movements and resistance levels.