$3K Ahead? Bitcoin Price Bounce Is Again Losing Steam

Omkar Godbole
Dec 10, 2018 at 11:00 UTC
Updated Dec 10, 2018 at 12:26 UTC
markets

Bitcoin (BTC) still has the potential to drop towards $3,000, despite a minor bounce from 15-month lows seen on Friday.

The leading cryptocurrency by market value picked up a bid at $3,210 three days ago –  a level last seen in September 2017. The ensuing corrective bounce, however, seems to have run out of steam, as bitcoin is currently trading at $3,470 on Bitstamp – down 4 percent from yesterday’s high of $3,633.

It’s worth noting that prices are currently down more than 80 percent from the record high of $20,000 reached last December. Further, BTC has depreciated close to 47 percent in the last month, forming record oversold conditions.

Even so, BTC  is struggling to post a notable price bounce, which indicates bearish sentiment is still strong.

As a result, the cryptocurrency is likely to remain on the defensive in the short-term, at least. Notably, the 3-day chart, which can offer a better picture of the broader market trend than the daily and intra-day charts, is indicating room for a drop below the psychological support of $3,000.

3-day chart

As seen above, the previous three-day candle closed below support at $3,463 (low of multiple three-day candles in September 2017), validating both the recent high-volume sell-off from $6,200 and the bearish lower-high pattern carved out along the downward sloping 5-candle moving average (MA) over the last few days.

Further, both the recent “death cross” crossover between the 50- and 200-candle MAs and the steeply descending 10-candle MA are indicating a bearish setup.

As a result, BTC has potential to test $2,972 (September 2017 low) in the near-term.

4-hour chart

Over on the 4-hour chart, BTC is struggling to cut through the descending trendline hurdle (marked in yellow), currently at $3,540. A break above that level could yield a stronger corrective rally to $3,800 (falling trendline hurdle).

The RSI, however, has already dived out of the ascending trendline, signaling bearish conditions. BTC, therefore, may have a tough time clearing the immediate resistance at $3,540.

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  • BTC risks falling to $2,972 (September 2017 low) in the near-term, according to the 3-day chart.
  • Prices could rise to $3,800 if resistance at $3,540 is cleared in the next few hours. The bearish outlook, however, would only be invalidated if the descending 10-candle MA on the 3-day chart, currently at $4,250, is scaled.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View

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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.