Bitcoin (BTC) is retesting a crucial support area after its price slid 5% from the recent highs and fell below the $90,000 barrier. Some analysts have suggested that the cryptocurrency’s structure remains intact, but warned that it must bounce quickly or risk retesting the November lows.
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Bitcoin Retests $88,000 After Rejection
On Friday, Bitcoin lost the recently reclaimed $90,000 level, falling to a key support area before stabilizing. The flagship crypto has been attempting to recover from the November market correction, which sent its price to a seven-month low of $80,600.
Since reaching its local lows two weeks ago, the cryptocurrency has traded within a macro re-accumulation range, between $82,000 and $93,500, attempting to break out of this zone on Wednesday, when it reached a multi-week high of $94,150.
However, as the first week of December approaches its end, BTC has lost the upper area of its local range again, falling below its monthly open and tapping the $88,000 support.
Amid the drop, Analyst Ted Pillows noted that BTC has been struggling to reclaim the $94,000 resistance, adding that price “wants to go lower here before another breakout attempt.” Therefore, he suggested that a bounce back from the $88,000-$89,000 support zone is likely.
Altcoin Sherpa affirmed that the ongoing retest would confirm whether the recent bounce was “just lower highs and price is going lower or if we actually have any juice to bounce to like 100k or something.”
The analyst outlined two potential outcomes. In the first scenario, the flagship crypto would retrace to the $87,000-$89,000 area and bounce above the $93,000-$94,000 resistance levels.
In the second scenario, Bitcoin would continue to move sideways below the local resistance before eventually sliding to the November lows and potentially lower levels. Per the analysis, the leading cryptocurrency must bottom quickly, or it will risk the second outcome.
BTC Shows Shallowing Pullback Tendency
Analyst Rekt Capital also pointed out that Bitcoin continues to face rejection from the range high resistance. However, he considers that investors should not worry as long as the pullback isn’t as big as the previous ones.
If “the rejection is shallower than the previous two, then this resistance will continue to weaken until eventually breached,” he explained, adding that “as long as this weakening continues, BTC should be able to finally breach this resistance over time & try to challenge the multi-week Downtrend above.”
Earlier this week, the analyst affirmed that BTC’s consolidation structure will remain intact as long as Bitcoin closes the week above the range lows. He also noted that its Macro Downtrend, which “has been dictating resistance throughout this phase of the cycle,” remains the dominant structural barrier and the level to break.
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As the price stabilized between the $88,500-$89,350 area, the analyst added that today’s retracement “continues to be a shallower pullback than the previous two,” which keeps the range “‘retrace shallowing’ tendency” intact.
He noted that Bitcoin could technically drop into the ascending two-week support trendline, or tap the $86,000 level and still perform a shallower correction than the recent 10% drop.
As of this writing, Bitcoin is trading at $89,400, a 2.9% decline in the daily timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
