Bitcoin Eyes Crash Towards $6K as Market’s Distress Grows

Bitcoin opened on a faint note this Monday as the market showed a lack of sense of direction owing to low volatility.The world’s leading cryptocurrency was trading at around $7,575.27 as of 1429 UTC after rising by 0.8 percent since the market open. The move upside brought the asset’s net month-to-date gains up by 0.4 percent.It additionally revealed traders’ fear of making big moves after bitcoin established its seven-month low in November, followed by an alarming pump-and-dump behavior on spot exchanges in the first week of December.The situation has brought bitcoin closer to the possibility of undergoing further breakdowns. The price has rejected advances above the $14,000 level settled earlier this year. It is now under by more than 50 percent and continues to make fresh declines in a giant descending channel.Strong Price CeilingThe cryptocurrency’s near-term rallies have met rejection near the upper trendline of the Channel. The price briefly tested levels near $13,500, $12,000, and $10,500 since July but failed to transform the upsides into full-fledged breakouts.Meanwhile, it kept on establishing fresher lower lows, the last one towards $6,526, indicating that traders have not found a strong bitcoin accumulation area yet.bitcoin, bitcoin priceBitcoin is trending inside a medium-term descending channel | Source: TradingView.comIn the chart above, the price is evidently struggling to register fresh gains above the purpled area, which has earlier served as support to bitcoin’s bounce-back attempts.A strong price ceiling is gravitating the price towards the redded area, defined by pivot support of $6,000 – a level known for behaving as a psychological barrier to both bears and bulls in the 2018-19 trading period.Interim Structure Also Targets $6,000-SupportOver the last ten days, bitcoin is fluctuating inside what appears to be a Symmetrical Triangle. Two converging trendlines are creating a string of peaks and troughs, moving forward at a roughly similar slope. The height of the Triangle is close to $800, which means its breakout should result in a price move of – at least – equal proportions, in either direction.Bitcoin getting closer to the apex of its interim symmetrical triangle | Source: TradingView.com, BitStampWith volumes going down and bitcoin inching towards the apex of the Triangle, there is a strong likelihood of a breakout in the direction of the previous trend. Such a move could crash bitcoin towards the $6,000-$6,500 area.Trading the Bearish SetupAn initial short position towards the $6,500 level from around the current market price looks ideal. From a risk management point of view, maintaining a stop-loss order above the Triangle at $7,570 is recommended. Breaking below $6.5K could have traders extend their positions towards $6,000.Looking to the upside, a long entry towards $7,700 could promise small yet decent returns while preserving its risk with a stop-loss near the Triangle support makes sense.Featured image from Shutterstock

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