Is Bitcoin (BTC) Ready To Decline Below $9k Again?

Is Bitcoin (BTC) Ready To Decline Below $9k Again?

Bitcoin (BTC) has run into resistance at the $9,529 level which it is not likely to easily break past. The most probable scenario would be a decline to much lower levels in the days and weeks ahead. The first level would be the 61.8% fib level around $8.2k after which it would have to decline down to $7.4k. The thing is, markets can remain irrational longer than investors can stay solvent. What is happening at the moment is completely irrational as the price seems to be projecting strength above the 200-day moving average when it has faced such a strong rejection at the previously broken market structure which has now become a strong resistance zone.

The daily chart for BTC/USD also shows that the price has been trading sideways the past few days and will now have to make a decision. If it declines as it did before, then we would want to see a few successive candles close below the 200-day moving average before we enter bearish position. On the other hand, it if rallies higher from here, we would want to wait for confirmation of a higher high and a higher low to be bullish on the market. The fact that everyone is bullish on the market before the next halving decreases the odds of a substantial rally before the next halving. That being said, any short-lived pumps to the upside cannot be discounted which is why it is important to not be overly bearish just yet and to wait for confirmation.

The daily chart for BTCUSDLongs/BTCUSDShorts indicates that the market is likely to inflict pain on Bitcoin bulls in the near future now that the ratio has  declined below the 1.272 fib level. The next target after further downside would be the 61.8% fib level which means that we may see a stop hunt around $9k and lower to trigger a decline down to $8.2k and eventually lower. Psychological levels like $9k is where most retail bulls end up putting their stops around when they see the price shooting upwards. We saw the same thing around $8k and it has happened throughout in the past.

The most important one of such psychological support levels was the $6k one. When the price crashed below it, we saw the beginning of a major decline down to $3k as a stop hunt chain reaction was triggered. It all happened too fast and most retail bulls did not have time to get out of the market and saw their stops being hit. It is important to be cautious because the same thing could be happening again. The halving FOMO is not likely to end well for a lot of retail bulls that are blindly optimistic at the moment. Regardless of your bullish or bearish bias, I think it is important to always wait for confirmation before entering a trade.

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