Bitcoin Price Faces Drop to $6.1K After Range Breakdown

Omkar Godbole
Oct 30, 2018 at 11:00 UTC
Updated Oct 30, 2018 at 19:26 UTC
markets

Bitcoin’s (BTC) downside break of the recent narrow trading range may have opened the doors for a drop to key support at $6,100, technical charts indicate.

The leading cryptocurrency, which was sidelined above $6,400 for 10 days straight, fell to two-week lows near $6,200 yesterday, confirming a range breakdown.

Essentially, the bears have come out victorious in a tug of war with the bulls. As a result, risks are skewed to the downside. More importantly, a prolonged period of extremely low volatility ended with a sell-off yesterday, hence, there could be more losses to come.

Still, the bears are cautioned against being too aggressive, as a bounce from the 21-month exponential moving average (EMA) support of $6,109 cannot be ruled out. Further, the trendline connecting June lows and August lows is lined up at $6,094.

As of writing, BTC is changing hands at $6,250 on Coinbase, representing a 1.8 percent drop on a 24-hour basis.

Daily chart

As seen in the above chart, the 5-day and 10-day EMAs have rolled over in favor of the bears following yesterday’s range breakdown.

The indicators are also biased toward the bears. For instance, the MACD has produced a bearish crossover, while both the relative strength index (RSI) and the stochastic are reporting bearish conditions below 50.00.

Monthly chart

Over on the monthly chart, the sell-off from the record high of $20,000 seems to have ended around the 21-month EMA in the last four months.

So far, however, the bulls have failed to produce a meaningful bounce, despite the repeated bear failure to beat the EMA support.

The bear market would resume if the cryptocurrency closes below the 21-month EMA tomorrow (monthly close).

View

  • The range breakdown could yield a drop to major supports lined up at $6,100.
  • A UTC close today below the trendline support of $6,094 would bolster the already bearish setup and boost the prospects of a monthly close (tomorrow) below the 21-month EMA.
  • A UTC close above the 10-day EMA of $6,355 would weaken the bearish pressure.

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

Trading 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.