Bitcoin and the entire crypto markets incurred some volatility over the weekend that allowed BTC to climb to highs of nearly $8,300 yesterday before quickly reeling back down to below $8,000.
Today’s drop further confirms that Bitcoin isn’t quite ready to stabilize within the $8,000 region and may signal that a further pullback to $7,300 is necessary before the crypto incurs enough buying pressure to propel it higher.
Bitcoin (BTC) Drops to $7,800 After Surging Yesterday
At the time of writing Bitcoin is trading down just over 1% at its current price of $7,830, down from 24-hour highs of nearly $8,300 that were set yesterday.
The lower-$8,000 region has proven to be an area of resistance for the cryptocurrency, as it has tried, and failed, on multiple occasions to stabilize above $8,000.
Despite this, it is important to note that each rejection that has come about as a result of BTC’s move into this region has been relatively small, signaling that Bitcoin’s upwards momentum is still alive and well, and likely to extend further in the near future.
While looking towards Bitcoin’s weekly candle close yesterday, The Crypto Dog, a popular analyst on Twitter, said that the strength and volume behind the recent rally validates its strength and long-term significance.
“Hell of a bullish weekly close on #Bitcoin with near record breaking volume, solidifying the strength and validity of this rally. $BTC / $USD is full. Weekly resistance: ~8215. Weekly support: ~7300,” he explained, adding in a later tweet that this past week BTC did incur record breaking volume on crypto exchange Bitmex.
Analyst: BTC May Draw Back to $7,300 Before Surging Higher
Although this week’s price action was certainly bullish, it is important to note that the cryptocurrency’s current weekly support level exists at roughly $7,300, and one prominent analyst recently explained that he is waiting for BTC to pullback to this price level before entering any fresh long positions.
DonAlt, another popular analyst on Twitter, discussed this possibility in a recent tweet, explaining that he believes Bitcoin and other major cryptos may incur some selling pressure before they continue their upwards ascent.
“$BTC weekly update: Just closed my ETHUSD and BTC long from 7300 & 235 respectively. The way I margin trade a bull market is to buy support & take profit at resistance while staying in spot positions. I’ll look for 7300 to relong, if that doesn’t happen I’ll long a S/R flip,” he said.
As the week kicks off and Bitcoin continues to push towards the $8,000 region, it is highly likely that traders and analysts alike will slowly gain greater insight into the longevity and long-term significance of Bitcoin’s current price rally.