The trading analysis from last time has performed exactly as planned. The price of Bitcoin hesitated for a bit before extending the rally.
Price action traders were targeting the 8,000 level, which has been reached. Where is price going from here?
In the image above, I have shown the 4-hour chart of the BTCUSD.
It looks like price has just touched the psychological level at 8,000. This level coincides with a previous high, as well. I have outlined in the red square the resistance zone that was formed on the 7th of November.
What can possibly happen from here?
The first potential scenario is to see the price breaking out of the 8,000 level. To see that happen, we will need more bullish news or a clear price action setup to indicate the willingness of traders to go long.
A second hypothetical scenario is to see the price rejecting the 8,000 level and forming a bearish pattern. If such a price action setup confirms my expectations, then we might see the price dropping down to the major support level at 5,600.
I would not be surprised to see even a larger drop if price rejects the 8,000 level.
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