Bitcoin is forming a death cross as it struggles below the key resistance level of $88,000.
The resistance at $88,000 has proven to be extremely strong for Bitcoin's upward movement.
The next move depends on Bitcoin's ability to break the resistance or maintain support.
Recently, Bitcoin's price has hovered around $78,650, facing strong resistance at the $88,000 level. The chart published by analyst 'The Great Matspai' provided a clear technical signal: Bitcoin is completing a deadly cross. If the short-term moving average falls below the long-term moving average, the outcome is considered bearish according to general technical analysis. Therefore, traders are speculating about the continuation of Bitcoin's decline, which has been trading just below the key resistance level.
Resistance around $88,000 delays Bitcoin's sell-off.
Bitcoin is currently trading below the resistance level of $88,000, as both bulls and bears are locked in a fierce struggle at this level. The $88,000 resistance level is significant enough to serve as a major resistance area. For several weeks, Bitcoin has attempted to surpass this level but has failed, ultimately forming a death cross. This effectively confirms that it is a strong barrier against any price increase.
The formation of the death cross also reinforces the bearish outlook. A death cross may be followed by a prolonged period of decline, indicating a potential start to the downtrend. This bearish expectation is also attributed to Bitcoin's attempts to recover, but it has consistently failed to close above the $88,000 level. Therefore, traders are wary that the likelihood of further declines represents an increasing concern.
Will Bitcoin be able to break out or will it head towards further declines?
As Bitcoin's price tests the resistance level at $88,000, traders and analysts are closely monitoring for signs of an imminent breakout or an extension of the current decline. If the death cross proves accurate, the moving averages suggest that the market may soon experience further weakness. Historically, death crosses indicate that the bulls are pushed aside, but not always immediately following the cross.
Importantly, whether Bitcoin tests the key support levels will determine its next trajectory. However, if Bitcoin loses the resistance level at $88,000 and the lower support levels, the risk of further downward pressure will remain. On the other hand, a strong breakout above $88,000 would be momentum-driven; however, it requires greater buying strength to compete with the upper resistance level.
