The aftermath of Bitcoin’s recent rally up to highs of $7,500 – and subsequent rejection – has been grave for bulls, as BTC has been caught within a strong downtrend that is leading the cryptocurrency down to its key support region that exists around $7,000.
It is important to note that one key factor is currently showing signs that this current sell-off may be weaker than it appears, which may mean that it will be short lived and followed by a bounce that leads the crypto back up to its resistance within the mid-to-upper $7,000 region.
Bitcoin’s Bears Roar as They Spark an Intraday Sell Off
At the time of writing, Bitcoin is trading down just under 1% at its current price of $7,270, which marks a notable decline from its daily highs of $7,400 that were set during an early morning rally attempt that resulted in it dropping to its current levels.
This latest rejection comes closely on the heels of the one seen last week, when BTC surged to highs of over $7,500 before facing insurmountable resistance that sparked the ongoing downtrend.
It is important to note that Bitcoin’s bulls have made many attempts to rally over the past several weeks, with each attempt resulting in strong and swift rejections that lead the cryptocurrency back to its support within the lower-$7,000 region.
HornHairs, a popular crypto analyst on Twitter, explained in a tweet from earlier this morning that the buying pressure the crypto has found despite its recent break below its swing high signals that it may soon see further upwards momentum.
“$BTC short: Flipped short upon a break back below the swing high, already bouncing hard and back above Monday’s low, might flip long again,” he explained while pointing to the chart seen below.
Flipped short upon a break back below the swing high, already bouncing hard and back above Monday’s low, might flip long again pic.twitter.com/TfdhFXaPwN
— HornHairs 🌊 (@CryptoHornHairs) December 31, 2019
This Key Factor Signals That the Current Sell-Off May Be Short Lived
Cantering Clark, another popular crypto analyst on Twitter, explained that active and passive sellers are not currently working cohesively, which means that shorts will be caught off guard if BTC’s bulls ardently defend this level.
“Cumulative Volume Delta showing heavier selling into this low, yet less follow through than previously around 7200. Wouldn’t be surprised to see shorts caught offside right here temporarily. Active and Passive not working together right now,” he explained while pointing to the chart seen below.
Cumulative Volume Delta showing heavier selling into this low, yet less follow through than previously around 7200.
Wouldn’t be surprised to see shorts caught offside right here temporarily.
— Cantering Clark (@CanteringClark) December 31, 2019
As BTC inches lower to its key support level at $7,000, how buyers respond to this level will be imperative for determining which direction the crypto will trend in the first days and weeks of the new year.
Featured image from Shutterstock.