Bitcoin Eyes Bear Revival After Key Support Breached

Omkar Godbole
Jun 22, 2018 at 10:05 UTC
Updated Jun 23, 2018 at 12:20 UTC
markets

Bitcoin’s (BTC) bears may be building for a strong comeback, having pushed prices to a eight-day low below $6,300 earlier on Friday.

The price fell to $6,286 on Bitfinex at 09:50 UTC, the lowest level since June 14, and, at press time, was changing hands at $6,326, down around 6 percent over 24 hours.

As discussed yesterday, the cryptocurrency’s persistent failure to scale the $6,800 mark in a convincing manner had raised the prospects of another leg down in bitcoin prices.

It seems that process is now underway. Bitcoin breached the key support of $6,620 a couple of hours ago – signaling that the relief rally from the June 13 low of $6,108 has ended at $6,850 (June 18 high) and the bears have regained control.

The technical charts now indicate scope for a drop below $6,000 over the weekend.

4-hour chart

BTC’s drop below $6,620 has confirmed a rising wedge breakdown – a bearish reversal pattern indicating the corrective rally has ended and the broader bearish trend has resumed.

The stage is now set for a drop to $5,090 (target as per the measured height method, i.e. pole height subtracted from breakdown price).

The target looks feasible as the long-term technical charts are also biased to the bears.

Weekly chart

As seen above, the pennant breakdown confirmed earlier this month opened up downside towards 100-week moving average (MA), currently located at $4,551.

Meanwhile, the bearish crossover between the 5-month and 10-month moving averages (MAs) also favors a convincing break below the immediate support of $6,000 (February low).

View

  • BTC will likely find acceptance below the immediate support of $6,000 (February low) over the weekend, and could drop to $5,090 (target as per the measured height method) over the next couple of weeks.
  • A daily close (as per UTC) above $6,850 (June 18 high) would abort the immediate bearish view.
  • A high volume break above the 50-week MA, currently located at $6,958 would signal long-term bearish invalidation.

Bitcoin image via Shutterstock

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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient 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 accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.