• Bitcoin defends $7,400 support but downtrend targets $7,200 before recovery ensues.
• The trading sessions before the weekend are likely to characterized by ranging or sideways trading activities.

Bitcoin’s $8,000 support finally gave in to the selling pressure. Just as it has been predicted by many crypto analysts, Bitcoin continued to weaken towards $7,000. Fortunately, $7,400 came out as a strong support area. XBT/USD bounced back up stepping above $7,500. The price is doddering at $7,568 amid a generally lethargic but bullish momentum.

The sharp drop was indeed devastating to the investors. However, Bitcoin longs traders are choosing to remain bullish. From a technical perspective, bullish sentiments are supported. It should be apparent that lower corrections to levels around $7,200 are still possible.

Meanwhile, the formation of a double-bottom pattern is what the bulls are banking on for recovery. If Bitcoin reacts to the pattern as expected, its impact would have immense positive results. For instance, the journey above $8,000 will be a walk in the park. Besides, if $7,200 is the bottom Bitcoin is hoping to find, its target on the upside is $8,400.

An analysis of the Relative Strength Index shows Bitcoin settling in a lower consolidation range between $7,400 and $7,600. A clear bullish signal will follow the RSI’s resurface above 30. Further movement above the descending trend will place Bitcoin in a trajectory towards $8,000.

Bitcoin must reclaim the position above the 50 Moving Average on the 4-hour chart. This move will cement the influence of the bulls in the market.

BitMEX index price: $7,562

Volume: $3.4 billion

Open Interest: $751 million

Trend: Short-term bullish

RSI: Ranging direction signals sideways trading