Bitcoin is testing support with bears still at large - What’s next?

Looks like volatility is back with Bitcoin as the world’s largest cryptocurrency has yet again taken traders by surprise after it dropped 8.72% to the daily low at $6,068 yesterday. After trading in between $6600 to $6800 over the last few days, BTC failed to hold above the key support at the $6,458 region and broke the sideways channel.

Throughout this week we saw some bearish signs. These included a symmetrical triangle on the 4-hour chart, a double-top bearish formation, and the RSI indicator pointing towards a critical resistance around the 50 mark. Besides this, the trading volume has also been declining throughout the week.

Whales at play?

As reported earlier by The Daily Chain, the number of transfers to major exchange addresses fell by 35% from 33,303 to 21,048 over the last 12 days. Some analysts suggested that this was an indication of declining selling pressure as most of the investors had moved funds out of exchanges or cashed out. However, it looks like some whales were at play here.

Prior to the correction, cryptocurrency analyst Cred said that the BTC was retesting the weekly resistance. As per previous records, when the price tests a key resistance level with low volume and non-existent buying demand, it is often followed by a large drop.

$BTC

Retesting weekly resistance.

Daily market structure is bullish but i) weekly close was bearish; and ii) no daily close above resistance ($6900) yet.

My bias is bearish until at least >$6900 (daily) but if resistance breaks a teleport is more likely than a pullback. pic.twitter.com/SGUxo8g6Ux
— Cred (@CryptoCred) March 27, 2020

Furthermore, Bitcoin’s recent move has somewhat been following the traditional market which also saw losses. The Dow suffered a 915 point loss, while the S&P 500 dropped 3.37%, and Nasdaq was down 3.79%. However, throughout the week, the traditional market was in the green but BTC flatlined around the $6,600 area.

Next Targets

Right after the drop, BTC found support at $6000 with $5900 as the next target below which the token could see its price drop below $5500. Traders are trying to reclaim the $6,200 support while the price sits above the 12-MA daily.

On the other hand, BTC is set to hit the next resistance at the previous key support range of $6400. If the bulls manage to break past this range, BTC could be back at the $6600 – $6800 region which it has been struggling to break past. The Stochastic RSI oscillator has made a crossover and we could see a short-term bearish correction.

As of now, $BTC is trading at $6258, down 5.88%. The total cryptocurrency market cap is up from a monthly low of $153 billion, now standing at $175 billion with BTC dominance at 65.3%.