Bitcoin Fails to Break $7.8K and Now Risks Reversing to New Lows

As the short term trend is still upwards, should traders be cautious about the recent price action? Let's take a look at the charts.

The overall market cap chart often provides a more unobstructed view than Bitcoin regarding price movements and, in this case, is also showing some clear signals.

Currently, the price has tested whether that level can be confirmed support and did just that with a bounce from $175 to $207 billion.

The BTC price has seen a surge of $1,300 during the week from $6.5K. However, it was not able to break through the next resistance at $7,800.

Such a level is a reference point for traders looking for selling opportunities, and thus, the price reversed and confirmed the $7,800 level as resistance.

For the bulls, breaking and flipping this $8,000-8,300 level into support would be ideal, which would also cause the price to break out of the downtrend.

A potential weak bounce to $7,700 can occur from this level of support, which I'd classify as a short opportunity before the price is ready to break downwards to $6,900-7,000 area.

Why? Well, if the price can hold the $7,350-7,400 and bounce significantly from it, another push to the upper resistance zone can be expected.

If the price is not able to break through $8,000-8,300 again, then that would be a great short opportunity before another move down towards $7,000.

As a whole, recent price action has presented a nice v-shaped bottom that occurred at the $6,500 level through which the 0.618-0.65 Fibonacci level and trendline held up.