Bitcoin Drops 5% Making $12K the Level to Beat for the Bulls


    • BTC has fallen more than $1,000 in the last 24 hours, establishing a bearish lower high at $12,061.
    • A high-volume break above $12,061 is thus needed to revive the bullish view put forward by a bearish channel breakout seen in the 4-hour chart earlier this week. That would open the doors to $13,880.
    • A move below Wednesday’s low of $10,830 would shift risk in favor of a drop to Tuesday’s low of $9,614.

    Bitcoin’s (BTC) price needs to break above $12,061 to mitigate bearish pressure.

    The top cryptocurrency by market value is currently trading at $11,200 on Bitstamp, representing a 5 percent drop on a 24-hour basis.

    The price drop contradicts the bullish picture painted by technical charts – the hourly chart was reporting a high-volume bullish breakout in the European trading hours yesterday.

    Further, some observers called a bull revival following Tuesday’s sharp recovery from $9,600. For instance, renowned cryptocurrency trader and analyst Josh Rager tweeted Wednesday that BTC is looking “extremely bullish.”

    Overall, BTC was looking primed for a rally to key resistance at $12,448 yesterday. Instead, prices topped out at $12,061 and fell back to $11,800 earlier today, charting a bearish lower-high pattern.

    As a result, a high-volume break above $12,061 is needed to revive the bullish view.

    4-hour chart

    The falling channel breakout confirmed July 3 ended up creating a second recent bearish lower high at $12,061; the first created June 28 at $12,448.

    The failure to post big gains above $12,000 could be associated with the fact that buy volumes (gree bars) remained low even after the channel breakout.

    A break above $12,061 would revive the bullish view put forward by the bearish channel breakout and open the doors to $13,880.

    The move above the latest bearish low, however, need to be backed by a surge in volumes.

    Daily chart

    The 5 percent drop seen overnight took the shine off the bullish hammer reversal seen in the previous two days.

    That said, prices are still holding above $10,830 – the low of Tuesday’s bullish “marubozu” candle – a bullish continuation candle, which has little or no upper and lower shadows.

    So, the probability of BTC invalidating the bearish lower-high pattern with a high-volume move above $12,061 is still high.

    A break below $10,830 would shift risk in favor of a drop to Tuesday’s low of $9,614.

    Disclosure: The author holds no cryptocurrency at the time of writing

    Target image via CoinDeskArchives; charts by TradingView

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