Bitcoin remains in a corrective state, clinging to a falling wedge pattern on the 4-hour chart.
The cryptocurrency attempted a breakout during Friday’s North American session, but failed to keep gains above key resistance at $8,460 (former support) and fell back to $8,250 in Asia, keeping the falling wedge pattern valid.
Traders should note that the falling wedge is a bullish reversal pattern, meaning a breakout would suggest an end of the pullback from $9,200 and a resumption of the upward trend from $6,700.
A breakout on the 4H chart, however, looks unlikely, as the daily chart indicators are painting a bearish picture. The RSI has breached the upward trend from December lows and the MACD histogram is printing negative values.
Bitcoin established a lower high, as it failed to keep gains above $8,460 on Friday and fell back to $8,250.
To cut the long story short, traders can expect bitcoin to break lower to $8,000. Deeper support potential could be seen around the higher low near $7,670 established on Jan. 10.
On the flip side, a falling wedge breakout would bring resistance zone of $8,000-$9,000 in play.