Support Forming? Why $7.9K Is Bitcoin's New Price to Watch

The technical charts remain bullish for bitcoin and point to $7,900 as the key support zone.

AccessTimeIconApr 17, 2018 at 10:30 a.m. UTC
Updated Sep 13, 2021 at 7:50 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Bitcoin remains in a bullish territory for now and is looking at further gains, though a pullback is possible if support at $7,900 is breached, according to technical studies.

The cryptocurrency's first attempt to scale the long-term descending trendline (drawn from the Dec. 17 high and Jan. 6 high) failed on Monday and prices fell below $8,000 as expected at 12:00 UTC.

It's worth noting that the Bollinger bands (seen on the chart below) show the volatility dropped after BTC dipped below the psychological mark, likely signaling indecision among the bears. As a result, it is not surprising the dip below $8,000 was short-lived.

As of writing, BTC is changing hands at $8,145 on Bitfinex, largely unchanged on a 24-hour basis, but could soon report further gains as the hourly Bollinger bands indicate scope for a retest of $8,400–$8,500.

Hourly chart

hourly-3

The Bollinger bands (+2 and -2 standard deviations from the 20-hour moving average) narrowed after the dip below $8,000, indicating the low volatility period – popularly known as a Bollinger band squeeze.

The 19-hour squeeze ended with a bullish breakout. Additionally, the hourly relative strength index (RSI) is above 50.00 and trending north, also indicating a bullish setup. So, BTC could have another attempt at breaching at the trendline resistance seen today at $8,420.

However, a failure to capitalize on the bullish Bollinger breakout could yield a drop below $7,900 (previous day's low). In such a case, BTC will likely test 4-hour 200 MA lined up at $7,690.

That said, the outlook as per the daily chart still remains bullish.

Daily chart

daily-10

Only a daily close below $7,510 (double-bottom neckline/former resistance turned support) would abort the bullish view.

Meanwhile, a dip to $7,690 will likely find bids as the short-term momentum studies are biased bullish. The 5-day MA and the 10-day MA continue to slope upwards (bullish).

View

  • Bitcoin could revisit the descending trendline resistance seen today at $8,420. A daily close (as per UTC) above that level would confirm a long-term bearish-to-bullish trend change.
  • On the downside, a move below $7,900 could yield a fruther drop to $7,690.
  • A daily close below $7,510 would signal the rally from the April 1 low of $6,425 has ended.

Bitcoin on rail via Shutterstock

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.