XBT Analysis: Bitcoin Dangles At $7,200, Downtrend Eyes $6,000 – BitMEX Margin Trading

Bitcoin bulls wait anxiously for the falling wedge pattern breakout magic.
Bitcoin technical levels stuck in the negative as sellers trample on the buyers.

Bitcoin perpetual swap contract by BitMEX is leaning towards a downward momentum mid-through the week’s trading. From June 2019 highs close to $14,000, the largest crypto asset has been trimming gains profusely. However, recovery movements have also been numerous. Although, none has been forthcoming with the strength to push Bitcoin above $14,000 and towards $20,000.

The losses from the 2019 high have been forming a higher high and a lower low pattern. The combination of both trends created a falling wedge pattern currently grinding towards a breakdown. Unfortunately, the breakout will not be immediate because XBT/USD is still in the hunt for the bottom or reliable support.

XBT/USD daily chart

XBT/USD price chart by TradingView (https://www.tradingview.com/symbols/XBTUSD/)

At the time of writing, Bitcoin price is dancing right at the edge of a cliff, which is the 38.2% Fibonacci retracement level, taken between the last swing high of $13,916 to a swing low of $3,163 at $7,215. The contract is valued at $7,215 amid the expanding volume and shrinking volatility.

If the $7,200 support level is broken, Bitcoin bulls will try to find support at $6,800. Based on the prevailing trend, Bitcoin could refresh $6,500 and even extend the bearish trend to $6,000 before resuming the uptrend.

The Relative Strength Index (RSI) recovery hit a dead-end above 50 and is now dropping towards the oversold. Further correction downwards will only serve to encourage the sellers to increase their entries.

XBT/USD Technical Levels

BitMEX index price: $7,215
24-hour Volume: $1.68 billion
Open interest: $692 million
RSI: Bearish bias
Support: $6,800 and $6,500
Resistance: $7,500 and $8,000