Bitcoin (BTC) is currently consolidating above the crucial $26,000 level, a key threshold for the world’s largest cryptocurrency to continue its upward momentum and reach higher levels.
The recovery of this price mark on June 15th has given BTC holders renewed confidence, with the highly anticipated news of Blackrock, the largest fund manager in the world with over $10 trillion under its management, announcing a formal application for a new spot Bitcoin Exchange-Traded Fund (ETF) has further boosted their optimism.
Despite this positive news, Bitcoin still faces significant resistance ahead if it is to recover previously lost territories and solidify a bull run.
Higher Low At $25,800 Before Upside Breakout?
Crypto analyst WoeToe has recently shared his thoughts on the current state of the Bitcoin market, highlighting a crucial level that bulls should keep an eye on. According to WoeToe, Bitcoin has failed to break its resistance level at $26,600, indicating that the market may be experiencing a period of consolidation before making its next move.
WoeToe believes that BTC may set a higher low around the $25,800 level before breaking out of its current channel to the upside, as indicated by the yellow lines on the chart. This means that if Bitcoin were to drop to $25,800, it would be a critical level for bulls to defend to maintain bullish momentum.
Therefore, bulls must hold the $25,800 mark and prevent a drop below it. If Bitcoin successfully sets a higher low at this level and breaks out of its current channel, it could potentially open up new resistance levels and lead to a bullish trend in the market.
However, if bulls fail to defend the potential higher low at $25,800, Bitcoin could experience a further downtrend. In this scenario, the cryptocurrency may test its strongest support floor, indicated by its 200-day Moving Average (MA), currently at $25,200.
The 200-day MA has previously prevented Bitcoin from extending its downtrend since last week’s weekly opening.
Bitcoin Downside Risk Increases
Cryptocurrency trader Rekt Capital has warned Bitcoin investors, stating that the leading cryptocurrency has rallied straight into the 200-week Moving Average, which could act as new resistance and potentially trigger a two-step breakdown confirmation. This, in turn, could lead to further downside for Bitcoin shortly.
The 200-week MA is a widely-watched technical indicator that reflects the average price of Bitcoin over the past 200 weeks. It is considered a significant support level and has historically acted as a key price point for the cryptocurrency.
However, if BCT fails to break through the 200-week MA and instead turns it into new resistance, it could lead to a two-step breakdown confirmation. This would mean that the cryptocurrency would break through two key support levels quickly, potentially signaling a significant shift in market sentiment and leading to further downside.
Bitcoin has made multiple attempts to break through the $26,600 resistance level but has been unsuccessful. The cryptocurrency is trading at $26,400 and has yet to surpass the critical resistance mark.
Featured image from Unsplash, chart from TradingView.com