In the past few hours, Bitcoin (BTC) price dropped 3.85%, losing $9,000 and pulling back to $8,835.
The abrupt downside move occurred after Bitcoin price rallied to $9,188, slightly above the $9,150 target many traders had suggested the asset would reach before attempting a more decisive move toward $9,300.
Crypto market daily price chart. Source: Coin360
Traders had anticipated a rejection at either $9,150 or $9,300 and at the time of writing the daily timeframe shows the price holding above the 20-MA of the Bollinger Band indicator at $8,858.
BTC USDT daily chart. Source: TradingView
If the $8,900 support cannot be reclaimed, it’s possible that the price could drop to the 200-day moving average at $8,695 and below this the frequently tested support at $8,400 where the 128-DMA resides.
According to Cointelegraph contributor Michaël van de Poppe, a possible bearish scenario that could play out after the rejection at $9,150 would involve Bitcoin price failing to hold the 21-week moving average at $8,676.
BTC USD weekly chart. Source: TradingView
“Losing that zone and we’ll see momentum and $8,200 retest downwards as the primary possible outcome,” Van de Poppe explained. However, he emphasizes that from a macro perspective, Bitcoin’s market structure is more inspiring than worrying and explains that:
“The market has seen a big rally in the first weeks of this year, a retracement and correction are only healthy for a sustainable continuation of the market.”
In the short-term, holding the zone between the 200-DMA and $8,900 support is crucial or a retest of the $8,400 support is likely. A weekly close below the 21-WMA ($8,676) would raise concern as it is a closely watched level by many traders.
But currently, Bitcoin is yet to make a lower low under the $8,400 support so a short phase of consolidation leading to another retest of the $9,150 resistance seems more likely than a drop below key support levels.
Bitcoin daily price chart. Source: Coin360