The leading cryptocurrency by market value went below $7,850 in the U.S. trading hours yesterday,
Bitcoin (BTC) dived out of this narrowing price range situation on Wednesday, opening the doors for a deeper drop to $7,200.
It was really a series of higher lows and lower highs created in the first two trading days of the week which confirms a downside break of contracting triangular pattern
The period of indecision ended with At the end of it all, sellers gaining an upper hand throughout the period of indecision and the outcome of breakdown range neutralized the immediate bullish view by the near 13 percent price rise seen on Sunday as it was put forward.
From the fore going, BTC could continue to lose altitude in the short term. Currently, the cryptocurrency is trading at $7,530 on Bitstamp, which represents a 4&% drop on the day. Earlier on today,Prices hit an intraday low of $7,468.
The focus is mainly on the key support at $7,200 which is a level the bulls must defend, because a break lower would confirm a short-term bullish-to-bearish trend change on the technical charts.
Bullish exhaustion signaled by multiple rejections at $8,300 is proved by the action of Bitcoin yesterday as it dived out of the contracting triangle.
But more importantly is the range breakdown which is backed by a bearish below-50 reading on the similar strength index (RSI) and as well as a drop into bearish territory below zero on the moving average convergence divergence (MACD) histogram.
The downside is then the path of the least resistance.
As discussed earlier this week on the daily chart, witnessed are the early signs of temporary bearish reversal have emerged in the form of a “hanging man” candle. Analysing further, the RSI continues to create bearish lower highs and turning bearish for the first time happens to be MACD since May 2, 2019.
In the next day or two, Bitcoin (BTC) could complete the double-top forming pattern as can be seen above with a drop to $7,206 at May 18 low.
A double-top breakdown, a short-term bullish-to-bearish trend change and which would create room for a slide to $6,070 (target in terms of the measured move method) will happen when BTC close below $7,206.
Having said that, the historical strong support of the 30-day moving average (MA) is presently located at $6,475. In the next couple of days, $6,500 average will be seen sloping upwards. As a result, any following sell-off could be cut short near that level.
In the next 24 hours, it could turn bullish if prices rise above $8,050, which could be in contrast with the bearish developments on the short-term charts. Therefore a rally to $8,500 could be seen as it was in June 2018 high.
Disclosure: As at the time of writing, the author holds no crypto assets.
This article is basically intended as a news item to inform our readers of various events and developments that might affect now or in the future , the value of the cryptocurrency described above. The information contained herein is not intended to provide, and as such i does not provide, enough information to form the basis for an investment decision and you should not rely on this information for that purpose. The information presented herein is only accurate at the present time. not prepared by a research analyst or other investment professional. You should seek additional information as regards the risk and benefits of investing in any of the cryptocurrencies before delving into it.
READ MORE :
Credit: coindeskJOIN OUR COMMUNITY