Bitcoin's (BTC) retreat from the 200-day moving average gathered pace in the last 24 hours, suggesting scope for a drop to $8,000.
The cryptocurrency created a small doji candle at the moving average resistance on Wednesday, signaling indecision among the bulls, Bitfinex data shows. Prices then fell below the key support of $8,752 at 09:00 UTC yesterday, opening the doors for a deeper pullback.
Accordingly, BTC hit a low of $8,333 on Bitfinex earlier today and was last seen at $8,465.
Meanwhile, CoinDesk's Bitcoin Price Index (BPI), which represents the average of BTC prices on the world's leading exchanges, is seen at $8,471 – down 2.77 percent from the previous day's close (as per UTC) of $8,713.
- Despite the bullish 5-day moving average (MA) and 10-day MA crossover, the cryptocurrency failed to cut through the 200-day MA resistance on Wednesday.
- A bearish doji reversal (candlestick pattern) indicating the corrective rally from the March 18 low of $7,240 ended at the 200-day MA resistance, also on Wednesday.
- The retreat from $9,177 (Wednesday's high) to $8,333 (session low) has also established another lower high on the price chart (marked by circles).
- The relative strength index (RSI) has rolled over into the bearish territory (below 50.00), raising the odds of a further drop in prices.
Clearly, the daily chart favors a drop to $8,000. On the other hand, the scenario is looking somewhat more positive on the short duration charts below.
BTC has built a base along the 200-hour MA, while a bullish RSI divergence is also seen. Hence, prices may revisit $8,752 (former support turned resistance).
However, an upside break of the descending expanding channel could yield a retest of 200-day MA located at $9,223.
The daily chart favors the bears. On the downside, a move below the hourly 200-MA support of $8,355 could yield a downside break of the descending expanding channel, opening the doors for a retest of $7,240 (March 18 low) over the weekend.
However, a minor rally to $8,752 cannot be ruled out, courtesy of the bullish RSI divergence seen on the hourly chart.
Intraday bullish scenario: Acceptance above $8,752 would shift the odds in favor of a rally to $9,223 (200-day MA).
Note that, despite the pullback from the 200-day moving average, the 5-day MA and 10-day MA bull crossover is intact (5-day MA holds above the 10-day MA). Hence, a move above the daily high of $8,721 would bring potential for a rise to $9,200–$9,223.
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