Bitcoin’s recent decline below the support that had been established in the lower-$7,000 region has been driven by heavy selling pressure, and it does appear that bears are vying to break the short-term support level that has been established at $6,800.
One analyst is noting, however, that the crypto’s buyers have been able to absorb a good majority of this selling pressure – a sign that a failed attempt to break this level could lead to a noteworthy price rebound.
Despite this possibility, traders still believe that the technical degradation resulting from the recent retrace will be enough to catalyze further downwards momentum in the days ahead, potentially leading BTC into the $5,000 region.
Bitcoin Bulls Attempt to Absorb Heavy Selling Pressure
At the time of writing, Bitcoin is trading down just under 3% at its current price of $6,870.
The crypto has been able to hold steady above this support throughout the past day, with buyers and sellers reaching an impasse as they both attempt to tip the scales into their favor.
In the near-term, it does appear that $6,900 is the level that bulls must firmly surmount if they want to catalyze a sustained rebound, with crypto analyst Cantering Clark noting that the strong absorption of sell orders could be enough to push the crypto above this level.
“While this does look weak, I don’t really care to get aggressive here. ‘Weak’ is only 70$ away from putting a lot of traders on the wrong side of the ball. A lot of absorption at this low. Ripping back up only requires a move slightly over 6900,” he noted.
Image Courtesy of Cantering Clark
The above chart elucidates the ongoing absorption of sell orders that comes as bulls defend against a decline below $6,800.
Traders Still Believe a Decline Towards $5,000 is Possible
If Bitcoin does happen to lose its current buying pressure and declines beneath its support, there is a strong chance the next selloff could be quite intense.
One pseudonymous trader on Twitter recently offered a chart showing that BTC could be on the cusp of declining to as low as $5,600 in the days ahead.
Image Courtesy of George
The above chart does indicate that this would be invalidated if the crypto climbs past $7,200.
This level’s importance stems from it being a previous resistance that was flipped into support during the course of the last uptrend, before being broken below last week. It is possible that it will now prove to be an even stronger resistance level.
Featured image from Unplash.