Bitcoin is relatively bullish at the time of writing. Buyers were able to find stability above $19,000 on Monday. As predicted, closing the day above this crucial level was key to sustaining the uptrend. BTC/USD is almost hitting the resistance at $19,500, where it is likely to retreat.
Bitcoin is drawing closer to a correction
The flagship cryptocurrency is trading at $19,472 at the time of writing. Marginally on the upside is the stubborn resistance at $19,500. Trading closer to this crucial level is likely to lead to the formation of a double-top pattern.
A double-top pattern is a typical bearish indicator in technical analysis. It is formed when the price hits the same top for the second time without breaking it. The region represents an area of enormous supply. Reversals are common when these patterns form. However, they have to be traded with caution as they can be invalidated as well.
BTC/USD 4-hour chart
In this case, if Bitcoin fails to break above $19,500 and point towards $20,000 (next crucial resistance), a pessimistic outlook will come into the picture. Similarly, closing the day under this same level will call for more sell orders, perhaps leaving the bulls exhausted.
Price action on the downside is likely to lead to losses that might retest the short term support at $19,000. If the bearish leg extends further, Bitcoin might be forced to seek refuge at the 100 Simple Moving Average ($18,822), the 50 SMA at $18,700, and the 200 SMA at $18,154.
Bitcoin intraday levels
Spot rate: $19,442
Relative change: 170
Percentage change: 0.9%
Trend: Bearish
Volatility: Low
