Key takeout
- This week, Bitcoin kicked off on Sunday with leveraged positions exceeding $1.5 billion.
- The bearish trend followed last month’s record highs for digital assets, showing prices lowered within descending channels, falling below the 50-day moving average.
- Investors should keep an eye on major support levels around $107,000 and $102,000, while resistance levels to watch are at $117,000 and $123,000.
This week, Bitcoin (BTCUSD) prices declined, interrupting a rally that had brought the cryptocurrency back into the spotlight following last month’s peak performance.
The sell-off started on Sunday, leading to the liquidation of over $1.5 billion in Bitcoin leveraged positions. By late Thursday, Bitcoin had slipped below $109,000, marking its lowest price in a month. By Friday afternoon, the digital currency was hovering around $110,000—about 5% lower than the previous week and down 10% from its mid-August highs.
We’ll take a closer look at the Bitcoin chart and use technical analysis to pinpoint key pricing levels worth noting.
The downward channel takes shape
Since the bearish trend hit a record high for Bitcoin last month, cryptocurrencies have been trapped in descending channels.
Earlier this month, digital assets faced selling pressures near the upper trendlines of this pattern. Recently, bears have influenced prices to drop below the 50-day moving average.
Interestingly, the relative strength index transitioned from bullish to bearish territory last week, which seems to have weakened price momentum. Also, trading volumes at Coinbase, the largest U.S. crypto exchange, have dropped in recent months, suggesting a decline in investor interest.
It’s essential to identify the key support and resistance levels on your Bitcoin chart that investors might be watching closely.
Important support levels to monitor
Additionally, short-term weaknesses have pushed cryptocurrency prices down to test the $107,000 level. This area could offer support given its proximity to the last month’s swing low and two significant peaks formed in December and January.
Should prices fall below this key support level, the $102,000 region could become relevant. Buyers may look for entry points at this area, aligning with the lower part of the descending channel and the trendlines that connect the lows and some peaks dating back to December.
Resistance levels worth monitoring
As prices rise, investors will need to watch for the $117,000 mark. This level could face resistance as it corresponds with the retest of the upper trendlines in the descending channels observed throughout July.
A bullish breakout above this level may elevate Bitcoin prices to around $123,000. This area will attract considerable attention as it aligns with peaks just below the cryptocurrency’s all-time highs.
