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  • Bitcoin’s short duration charts indicate the bears are in control and prices could drop below $11,000 in the next 24 hours.
  • A strong bounce from the 5- and 10-week moving averages at $10,804 and $10,625, respectively, could fuel a rise back to $12,000.
  • A high-volume weekly close (Sunday, UTC) or a back-to-back daily close above $12,000 is needed to revive the bullish outlook.

Bitcoin (BTC) could drop below $11,000 in the next 24 hours, after sellers took victory in a four-day-long tug of war with the bulls.

The top cryptocurrency’s trading range had tightened in the four days to Aug. 9, with prices printing lower highs above $12,000 and higher lows in the range of $11,200 to $11,650.

That contracting triangle pattern represented a stiff battle between the bulls and the bears, as well as bullish exhaustion following a 35 percent rally from July 28 lows near $9,100.

A range breakout would have meant a continuation of the uptrend. Prices, however, dived out of the narrowing price range on Saturday, confirming victory for the bears.

The range breakdown had been expected, as a key technical indicator on the intraday charts was flashing signs of bearish reversal, as discussed on Friday.

So far, the downside has been restricted to levels around the former resistance-turned-support of $11,100. The cryptocurrency dipped to a low of $11,080 on Sunday before rising back above $11,500 earlier today.

As of writing, BTC is changing hands at $11,355 on Bitstamp, representing little change on a 24-hour basis.

Hourly chart

BTC fell from $11,871 to $11,200 in the 60 minutes to 12:00 UTC on Aug. 10, confirming a downside break of the narrowing price range. The breakdown was backed by a surge in selling volume, as represented by the red bar (above left).

On the line chart (above right), BTC has dived out of an inverted flag – a continuation pattern that accelerates the preceding bearish move.

The flag breakdown has opened the doors to $10,800 (target as per the measured move method).

Seasoned traders may consider a long-tailed hammer candle created in 60 minutes to 10:00 UTC on Sunday as a sign of bullish revival. The candle, however, lacked volume support.

That said, the hammer would gain credence if prices rise above the flag high of $11,589, in which case a rise to $12,000 could be on the cards.

Weekly chart

BTC created a candle with a long upper wick last week, as it failed to close (Sunday, UTC) above the $12,000 mark.

Notably, the cryptocurrency has failed four times in the last seven weeks to find acceptance above $12,000, as indicated by the candles with long upper wicks.

It is often observed that markets test dip demand after facing multiple rejections at key price levels. So, a pullback to sub-$11,000 levels, as suggested by the intraday chart, looks likely.

Note that the ascending (bullish) 5- and 10-week moving averages are currently located at $10,804 and $10,625, respectively.

A strong bounce from these levels, if any, could yield a break above $12,000. A bull revival, however, needs a weekly close above $12,000. That would imply a resumption of the rally from April’s low near $4,050.

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

Bitcoin image via CoinDesk archives; 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.