- Bitcoin recently faced a rejection at $9,500 that appears to be a grim sign for its macro outlook
- The cryptocurrency has since reeled back within its long-held trading range between $9,000 and $9,300
- How it trends next will likely depend on its reaction to this trading range
- Because BTC posted a failed breakout attempt, it is likely weaker now than it was during its last bout of prolonged consolidation at its current price levels
- One analyst is now putting forth a chart showing that the crypto could soon see a significant decline
- The indicator he uses is even suggesting BTC could tap $5,000
Bitcoin is currently consolidating following its latest rejection. Buyers were able to push it as high as $9,500 earlier this week before they lost their strength.
In the time since, the cryptocurrency has been sliding lower, and there’s no end in sight to its current bout of sideways trading.
In the near-term, how it trends next could be determined by whether or not bulls can support BTC above $9,000. The recent rejection struck a blow to its technical strength, potentially making it prone to further downside.
One indicator is now suggesting that the crypto could be gearing up to see a sharp downside movement that sends it down towards the $5,000 region.
Bitcoin Flashes Signs of Weakness Following Rejection at $9,500
Bitcoin’s break above its range high at $9,300 earlier this week sent the markets rallying higher and boosted investor sentiment.
The movement proved to be short-lived, however, as BTC quickly retraced from this level and is now trading squarely within its previous range.
This latest rejection seems to have confirmed that bulls are plagued by underlying weakness and suggests that the crypto could be positioned to see further downside.
As Bitcoinist reported yesterday, one analyst recently explained that BTC is forming a market structure incredibly similar to that seen just before the massive decline to lows of $3,800 in mid-March.
Image Courtesy of NebraskanGooner. Chart via TradingView.
If this pattern plays out as it did a few months ago, it could spark a notable decline.
The next decline likely won’t be as substantial as that seen in March, however, as that movement was perpetuated by a cascade of liquidations.
This Chart Indicates BTC Could Be in for Major Downside
Another analyst recently put forth a chart showing what appears to be a Gann Fan formation, with one overlaid indicator suggesting that the next movement will favor bears.
As seen below, the indicator suggests that Bitcoin will move towards the lower boundaries of the Gann Fan, which means it may decline towards the $5,000 region before finding any meaningful support.
Image Courtesy of Mitoshi Kaku. Chart via TradingView. Featured image from Shutterstock. Charts from TradingView.
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