Bitcoin’s recent volatility has done some damage to its underlying market structure, despite it being able to post an ardent defense of the lower boundary of its long-established trading range.
Yesterday, the crypto plunged to lows of $9,000 before finding any strong support, but it has since been able to rebound from these lows.
Despite its ability to rebound from its recent lows, analysts are noting that Bitcoin does appear to be technically weak following this latest movement.
One factor behind this weakness has been the break below a key multi-month trendline that had previously been guiding the cryptocurrency’s parabolic climb from its recent lows of $3,800.
The break below this level also coincides with the formation of a new horizontal resistance region just above BTC’s current price level.
These two factors could lead it significantly lower in the days and weeks ahead.
Bitcoin Posts Strong Rebound from Recent Lows, But Analysts Still Expect Further Downside
At the time of writing, Bitcoin is trading down just over 1.5% at its current price of $9,490.
This marks a notable rebound from its recent lows of $9,000 that were set at the bottom of the intense selloff it faced yesterday.
The rebound it posted from these lows allowed it to recapture its position within the long-held trading range between $9,300 and $9,900 that it has been caught within throughout the past few weeks.
The climb back into this range is certainly a positive sign for BTC’s bulls, but this latest decline further confirmed just how strong the resistance at $10,000 truly is.
BTC tapped highs of $10,050 two days ago before facing a swift rejection. The weakness caused by this is what led the crypto to decline down to its recent lows.
Analysts are noting that Bitcoin does appear to be weaker now than it was previously, as the region between $9,600 and $9,800 has now become a strong resistance level.
One trader spoke about this in a recent tweet, explaining that he is now anticipating a movement into the sub-$8,000 region.
“As long as we stay below blue I see no reason to be bullish here. Yesterday’s daily close was fairly ugly so I just re-entered my swing short targeting sub 8k,” he noted.
Image Courtesy of George. Chart via TradingView
BTC’s Latest Decline Shatters Parabolic Uptrend
On a smaller scale, the “V-shaped” recovery seen by Bitcoin in the time since it set mid-March lows of $3,800 has been parabolic.
This uptrend has been guided by a potent ascending trendline that has been tested and respected on multiple occasions throughout the past few months.
Yesterday’s decline, however, led BTC below this key level, opening the gates for a movement to $7,400 – according to one analyst.
“Parabolic uptrend has been broken,” he noted.
Image Courtesy of Teddy. Chart via TradingView
It does appear that the decline seen yesterday struck a significant blow to BTC’s underlying strength, potentially leading it to plunge lower in the days and weeks ahead.
Featured image from Shutterstock. Charts via TradingView.
