Bitcoin and the aggregated crypto market are currently caught within the throes of a volatile trading session, with BTC plunging below its key $12,000 support level.
The break below this crucial support caused it to plunge as low as $11,600, with bulls stepping up and guarding against a decline beneath this level.
Analysts are now widely noting that this recent price action has struck a significant blow to the cryptocurrency’s near-term outlook.
One indicator of this newly established weakness is a bearish divergence on Bitcoin’s Renko chart. The last time a similar pattern flashed, the crypto’s price plunged by $1,300.
If history rhymes, this could mean that the overnight decline simply marks the first the early stages of a larger and farther-reaching correction.
One trader is even noting that it is now “bounce or die” for BTC – with a failure for it to surge here potentially leading to a swift movement down towards $10,000.
Bitcoin Struggles to Hold $12,000 as Buyers Show Signs of Weakness
At the time of writing, Bitcoin is trading down roughly 1% at its current price of $11,850.
The crypto slid as low as $11,600 overnight before it was able to find some notable support.
From this point forward, it has been trading between $11,800 and $11,900, which happens to be the same trading range that it was caught within before the $12,000 breakout seen just a couple of days ago.
Unless it recaptures $12,000 in the near-term, bears could have the upper hand over bears, and BTC may soon reel significantly lower.
One analyst spoke about this possibility in a recent tweet, even going so far as to note that it is now “bounce or die” for the crypto.
He also noted that a failure for it to surmount $12,000 could lead it to decline to as low as $10,000 – marking a nearly $2,000 decline from its current price level.
“Bounce or die trying. Failure to continuously close above red dotted line (scam wick support) we are retesting 10k.”
Image Courtesy of Teddy. Chart via TradingView.
This Bearish Divergence Suggests a Massive Drop Could Be Imminent
To justify this, he points to a bearish divergence on the crypto’s Renko chart, noting that a $1,300+ pullback historically follows this pattern.
“I’ll leave you with this present to take a break from opening his. The last time BTC created a divergence like this, we saw a 13% pullback (Around $1300) – history repeated?”
Image Courtesy of Cold Blooded Shiller. Chart via TradingView.
How the crypto trends in the coming few days should offer insight into whether or not this bearish possibility will come to fruition.
Featured image from Unsplash. Charts from TradingView.