Bitcoin has been able to stabilize within the lower-$7,000 region in the time following its recent upswing, with its ability to flip this previous resistance region into support being a bullish near-term sign that suggests further upside may be imminent.
Presently, it does appear that a bearish undercurrent is beginning to form, however, as the cryptocurrency is currently flashing a few grim signs that could suggest its recent highs will be a mid-term top.
This comes after the benchmark crypto faced to swift rejections around $7,500 on two occasions, with analysts widely noting that this could spark a downside movement.
Bitcoin Stable Within $7,000 Region Despite Facing Multiple Rejections at $7,500
At the time of writing, Bitcoin is trading up just under 3% at its current price of $7,330, which is around the point at which it has been trading at in the time following its surge seen yesterday.
This rally led the crypto to highs of $7,500, which is where it has now faced two rejections at, signaling that this is a significant resistance region for the cryptocurrency.
If bulls are unable to step up and invalidate this level as resistance in the hours ahead, it is possible that this will lead the crypto to test the support it has established around $7,000.
One trader on Twitter mused the implications of this resistance in a recent tweet, in which he noted that its early-morning decline from its highs marks a “notable rejection.”
“BTC – a more notable rejection than the last one … bitcoin 1hr chart,” he said.
Image Courtesy of Big Chonis
It does seem as though this could be a short-term double top formation, although this bearish possibility will only be confirmed if the crypto continues declining further in the near-term.
Analyst: BTC is Flashing Some Bear-Favoring Warning Signs
One factor that could shift the tides back into seller’s favor and confirm $7,500 as an insurmountable resistance level is that buyers are struggling to maintain Bitcoin’s price above its 20-day moving average support, with its 12-hour chart also flashing a potential “tweezer top.”
Another analyst spoke about these bear-favoring factors in a recent tweet, saying:
“Bitcoin – Some warning signs as bulls lose MA 20 support on the 1 hour, 12 hour chart has potential for a tweezer top.”
If these factors do force Bitcoin lower in the days and hours ahead, the potential double top that has been formed around $7,500 could be confirmed, thus perpetuating the crypto’s selloff.