Bitcoin’s price congestion has ended with a convincing move below $8,460.
The digital currency was stuck in a narrow range of $8,460-$8,750 since Sunday. That range has been breached to the downside with a move to $8,380.
hourly chart
The range breakdown will likely accelerate the pullback from recent highs near $9,200, possibly yielding a test of the psychological support at $8,000. A violation there would bring next support at $7,800 into the picture.
Markets often test bears’ resolve to keep prices lower by revisiting the breakdown point (former support-turned-hurdle). Bitcoin, therefore, could see a bounce to $8,460-$8,500 before charting a deeper drop.
A rejection in that range would further strengthen the bearish bias. However, if prices find acceptance above $8,500, traders should reduce short exposure.
The outlook would turn bullish only if prices rise above $8,800. That would revive the bullish outlook and shift the spotlight to the 200DMA stationed at $9,000.
The average is widely followed by cryptocurrency traders and investors. So, if prices see a strong move through $9,000, the buying interest around bitcoin would strengthen, possibly bringing additional gains toward $9,400.
