Bitcoin (BTC) is once again testing a crucial support area after its price fell 5% from recent highs and fell below the $90,000 mark. Some analysts have suggested that the cryptocurrency’s structure remains intact, but warned that it must rebound quickly or risk testing November’s lows again.
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Bitcoin retests $88,000 after rejection
On Friday, Bitcoin lost the recently regained $90,000 level, falling back to a key support area before stabilizing. The flagship crypto has been trying to recover from November’s market correction that sent the price to a seven-month low of $80,600.
Since hitting its local lows two weeks ago, the cryptocurrency has traded within a macro reaccumulation range, between $82,000 and $93,500, attempting to exit this zone on Wednesday when it hit a multi-week high of $94,150.
However, as the first week of December comes to an end, BTC has once again lost the upper part of its local range, moving below the monthly open and tapping into the $88,000 support.
Amid the decline, analyst Ted Pillows noted that BTC has struggled to regain the $94,000 resistance, adding that the price “wants to move lower here before another breakout attempt.” Therefore, he suggested that a recovery from the $88,000-$89,000 support zone is likely.
Altcoin sherpa confirmed that the continued retest would confirm whether the recent rebound was “just lower highs and the price goes lower or if we actually have something to bounce back to 100,000 or something.”
The analyst outlined two possible outcomes. In the first scenario, the flagship crypto would return to the $87,000-$89,000 area and bounce above the $93,000-$94,000 resistance levels.
In the second scenario, Bitcoin would continue to move sideways below local resistance before eventually sliding to the November lows and possibly lower levels. According to the analysis, the leading cryptocurrency must bottom out quickly or risk the second outcome.
BTC is showing a superficial pullback trend
Analyst Rekt Capital too be that Bitcoin is still facing rejection from the range of high resistance. However, he believes that investors should not worry as long as the pullback is not as big as the previous one.
If “the rejection is more shallow than the previous two, then this resistance will continue to weaken until it is eventually broken,” he explained, adding that “as long as this weakening continues, over time BTC should finally be able to break this resistance and attempt to challenge the multi-week downtrend above.”
Earlier this week, the analyst confirmed that BTC’s consolidation structure will remain intact as long as Bitcoin closes the week above the lows. He also noted that the Macro Downtrend, which “has dictated resistance at this stage of the cycle,” remains the dominant structural barrier and the level to break.
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While the price stabilized between $88,500 and $89,350, the analyst said added that the current retracement “remains a shallower pullback than the previous two,” leaving the “retrace shallow trend” intact.
He noted that Bitcoin could technically fall into the two-week ascending trendline, or reach the $86,000 level and still stage a shallower correction than the recent 10% decline.
At the time of writing, Bitcoin is trading at $89,400, down 2.9% in the daily time frame.
Featured image from Unsplash.com, chart from TradingView.com