After reclaiming the key support that had been established at $6,800 yesterday, Bitcoin has once again lost this level, surrendering to bears as to navigates back towards its key short-term support that has been established around $6,600.
This comes just days after a prominent hedge fund manager noted that he believes Bitcoin is a “textbook short” opportunity, with its strong resistance in the lower-$7,000 region possibly being enough to spark a lasting downtrend.
The same fund manager is now doubling down on this bearishness, noting that BTC is currently hanging by its nails on the side of a proverbial cliff – a sentiment that suggests he believes a capitulatory downtrend is imminent.
Bitcoin Shows Signs of Weakness Following Firm Rejection in Mid-$7,000 Region
All of Bitcoin’s current weakness came about as a result of its firm rejection within the mid-$7,000 region just over a week ago, with its decline from highs of $7,500 halting the uptrend that had led the crypto to rally from its mid-March lows of $3,800.
Bulls did attempt to recapture BTC’s position above $7,000 following its recent rejection, however this just led to yet another rejection at $7,200 which further weakened its market structure.
This led Mark Dow – a hedge fund manager – to note that the overhead resistance within this region makes the benchmark digital asset a “textbook” short opportunity.
“Been saying…that bitcoin on the chart is facing massive overhead resistance. Based on this chart, this rn is a textbook opportunity to short,” he said while pointing to the below chart.
Image Courtesy of Mark Dow
This weakness seems to be further confirmed by Bitcoin’s inability to hold above its short-term support at $6,800, and it’s now imperative that buyers step up and ardently defend BTC from losing $6,600.
BTC Could Be Hanging from The Side of a Cliff
In the time since his aforementioned tweet was sent, it doesn’t appear that Dow’s sentiment towards Bitcoin has changed at all.
In a tweet from yesterday, he explained that Bitcoin is hanging on “the side of the cliff” at its current price levels, which seems to suggest that it could see a freefall if it dips below the support it has established just below its current price of $6,700.
“Right now, literally, bitcoin is hanging by its fingernails in the side of the cliff,” he bearishly noted.
Right now, literally, #bitcoin is hanging by its fingernails in the side of the cliff… $BTC $XBT https://t.co/zBSysZ5xzg
— Dow (@mark_dow) April 14, 2020
Unless the support Bitcoin has found around $6,600 gives bulls the upper hand over bears and sends the crypto racing higher, it does appear to be a strong possibility that it will soon see further losses due to its weak market structure.
Featured image from Unsplash.
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