Bitcoin Price Defends $8K But Pullback Still in Play

Prices hit a four-day low of $7,823 yesterday reportedly due to whale dumping over $50 million-worth of the cryptocurrency in one Bitfinex trade.

The sudden price drop raised the possibility that the rally from the April 1 low of $6,425 had run out of steam.

BTC's sharp return from $7,873 to $8,160 this morning established the area around $7,800 as a strong support level and indicates a strong dip-demand mentality in the market.

As of writing, BTC is trading at $8,090 on Bitfinex - largely unchanged on a 24-hour basis.

The recovery from the low of $7,823 to $8,168 signals a bearish pattern failure - that is, BTC witnessed a head-and-shoulders breakdown yesterday, seemingly signaling the rally from $6,815 had ended there was no bearish follow-through.

The price action indicates that bitcoin could challenge the resistance zone of $8,350-$8,420 seen in the daily chart below.

The descending trendline resistance has sloped lower to $8,350, while the 50-day MA has shifted lower to $8,416.

View BTC will likely test supply around $8,400 in the next 24 hours.

BTC's failure to defend the key support level could yield a pullback to $7,510.

Only a daily close below the ascending 10-day MA would indicate the rally from the low of $6,425 has ended.