The rejection of the $9600 price point has sent bitcoin on a downward trajectory, and furthermore the double top of $9600 means the chart pattern of BTC/USD has changed from an ascending channel (bullish) into an ascending wedge (bearish).
This gives us 2 possible scenario's.
1) the price descends towards both the 200 ma and bottom of the wedge where we find a lot of buyers ready to step in and propel the price back to the top of the wedge.
2) the price descends below the support of the 200 ma / wedge which would most likely trigger a long squeeze causing a huge drop down to $8000 or lower.
Currently technical indicators are strongly favouring the bears with the MACD starting to cross and point downwards, and the RSI having made a double top formation and now pointing downwards.
Trading ideas:
1) Please a sell order at around $8700, hoping to ride a long squeeze down to $8000. Stop loss can be set at $8850 to minimise risk in the event that the drop is a fakeout
2) in the event of a bounce from the support at $8800 enter a long position with target of either the top of the wedge around $9800, or previous high of $9600. Stoploss set at $8700
In both cases since we are in the ascending wedge pattern we can expect this to break to the downside, either on this attempt or if support at $8800 is validated then on the next attempt. A bounce back to the top of the wedge would bring another good short opportunity.
My overall forecast for BTC for the year is bullish, but I believe there is some pain to come in the days/weeks ahead.