Yesterday’s Bitcoin rally has led the cryptocurrency into the mid-$6,000 region, with the mounting resistance at $6,500 proving to be too much for BTC’s bulls to surmount. This has led to yet another bout of consolidation around this level.
One analyst is noting that Bitcoin’s bulls are currently being “put to the test” after losing a key technical level that was previously bolstering its price action.
If bulls want to further extend their newfound momentum and propel the crypto higher, it is imperative that buyers are able to defend the crypto from dropping below $6,350.
Bitcoin Loses Key Technical Level After Entering Bout of Consolidation
At the time of writing, Bitcoin is trading up just under 3% at its current price of $6,490, which is around where it has been trading at over the past day.
BTC’s rally up to these highs came about following its recent decline to lows of $5,800, which is the point at which bulls stepped up and catalyzed some decent momentum.
The fact that this short-term uptrend has stalled at its first key resistance level seems to elucidate some underlying weakness, suggesting that the crypto could be poised to face a rejection at this level.
Big Cheds – a popular cryptocurrency analyst on Twitter – explained in a recent tweet that BTC recently lost its EMA 8, with this ongoing bout of sideways trading marking a test for bulls.
“Bitcoin: 1 hour – Bulls being put to the test after losing EMA 8, lower BB dip and rally,” he explained while pointing to the below chart.
$BTC #Bitcoin 1 hour – Bulls being put to the test after losing EMA 8, lower BB dip and rally pic.twitter.com/OytdTaK1hz
— Big Cheds (@BigCheds) March 31, 2020
BTC’s Key Support Sits at $6,350, and a Break Below This Level Could Be Dire
Michaël van de Poppe, another popular cryptocurrency analyst, explained in a recent tweet that Bitcoin’s current trading range exists between $6,350 and roughly $6,500, with this lower boundary being BTC’s key near-term support.
“Bitcoin: Mostly range-bound, but it’s interesting that this monthly/weekly level at $6,350 provides support here. Might tap the resistance around $6,500-6,600 again, but mostly range-bound and not showing direction. Breaking range -> targeting $7,100/7,300,” he noted.
$BTC #BITCOIN
Mostly range-bound, but it’s interesting that this monthly/weekly level at $6,350 provides support here.
Might tap the resistance around $6,500-6,600 again, but mostly range-bound and not showing direction.
Breaking range -> targeting $7,100/7,300. pic.twitter.com/MXpx6pq2GI
— Crypto Michaël (@CryptoMichNL) March 31, 2020
If Bitcoin breaks below its near-term support, it is highly likely that it will continue declining until it retests the support that has been established at $5,800, with a decline below this level potentially leading BTC to see a free fall.
Featured image from Shutterstock.