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  • Bitcoin may be vulnerable to massive losses if $7,800 is broken.
  • Critical resistance is created by SMA200 on a daily chart.

Bitcoin (BTC) dropped from $10,000 to $8,000 during the last week of September. Since that time, the first digital coin has been moving in a tight range limited by $8,800 on the upside and $7,700 on the downside. At the time of writing, BTC/USD  is changing hands marginally below $8,000, mostly unchanged since the beginning of the month.  

Bitcoin’s technical picture

From the longer-term perspective, bitcoin price is moving within a downside trend, while inability to recover from a sharp sell-off bodes ill for BTC bulls.  

On the downside, BTC/USD is supported by SMA100 (Simple Moving Average) weekly at $7,780. This area has been limiting the decline since the beginning of the month. However, once it is broken, the downside momentum is likely to gain traction with the next focus on$7,450 (the lower line of the Bollinger Band on a weekly chart) and psychological $7,000. That’s where new buyers are likely to join the game and engineer the recovery towards $8,000.

On the upside, the first barrier is created by the highest level of this week $8,350. Once it is passed, the recovery may be extended towards $8,550  (the upper line of the Bollinger Band on a daily chart). this resistance separates us from a stronger resistance of $8,800 ( the highest level of this month and SMA200 daily) and psychological $9,000.

BTC/USD, the daily chart