Bitcoin’s price once again dipped after it was unable to hold $3,800 as a level of support. This drop led many cryptocurrencies to plunge nearly 5% and has further confirmed that BTC does not have enough buying pressure to allow it to decisively push above $4,000.
Now, Bitcoin has established a fresh support level at $3,700, which one analyst claims is an important price to hold above in order for further gains in the near-future to be possible.
Bitcoin Drops to $3,700 Before Finding Support
At the time of writing, Bitcoin is trading down over 2% at its current price of $3,760. Earlier today, BTC plunged to the low-$3,700 region before finding support and swiftly climbing back to its current price levels.
Luke Martin, a popular cryptocurrency analyst on Twitter, spoke about Bitcoin’s recent price action in a tweet, noting that $3,700 is now an important support level to hold above in order for further gains to be in the cards.
“While this third dump in the last 7 days into 3700 is slightly worrying, I still prefer to be long from down here until we start seeing closes below 3700. 4hr closes would give a hint the level is going to give. Daily close below would confirm it,” he explained.
He later noted that Bitcoin has still been able to hold above the aforementioned support level, despite the relatively large amount of selling pressure on this “bloody Monday.”
“$BTC still respecting support half way through Bloody Monday.”
Because this latest drop was significantly smaller than recent plunges that have led BTC to shed as much as $400 off of its price, it is possible that this drop will be quickly reversed by bulls looking to send Bitcoin back above $3,800.
Analyst: Traders Should Look Towards RSI For Insight into Where BTC is Heading Next
Although price action certainly gives traders and analysts significant insight into the strength and trends of a specific asset, one popular trader is now claiming that an analysis of Bitcoin’s RSI can give more insight into where BTC is heading next.
Wendy O, a popular cryptocurrency trader on Twitter, recently spoke about the importance of RSI, noting that she expects Bitcoin to continue trading sideways for the foreseeable future based on BTC’s monthly RSI.
“1M $BTC Monthly RSI is still in a downtrend – this is important because RSI measures change of price movements. Instead of analyzing the candles this tells me until we break the channel we can expect to see further sideways movement on a larger scale.”
She further added that Bitcoin’s weekly RSI is currently surging, which has historically been followed by a price drop.
“Stoch RSI is running mighty high on the weekly. Last time this happened we had a nasty fall incoming.”
As the market’s price action continues to unfold in the week ahead, traders and analysts alike will likely gain greater insight into which direction Bitcoin is heading in the near future.
