Bitcoin (BTC) hit a three-week low of $8,713 on Bitfinex earlier today and looks set to extend losses further, price chart analysis indicates.
As of writing, BTC is changing hands around $8,800 – below the 100-day moving average (MA) of $8,849 and down 2.42 percent from the previous day's close (as per UTC) of $9,018.
The 10 percent decline from the recent high of $9,990 has weakened the bulls and has boosted the odds of a deeper drop to the 50-day moving average lined up at $8,282.
The above chart (prices as per Bitfinex) shows BTC closed (as per UTC) yesterday below $9,149 (23.6 percent Fibonacci retracement), pushing indicators into bearish territory.
For instance, the relative strength index (RSI) has dipped below 50.00, confirming a short-term bullish-to-bearish trend change and opening the doors for a further drop in prices.
The 5-day MA and the 10-day MA are both trending south, having witnessed a bearish crossover earlier this week.
On the 4-hour chart, BTC has breached the trendline support in a convincing manner, and the 50-candle and 100-candle MAs have topped out (shed bullish bias).
The cryptocurrency looks set to test the gradually ascending (mildly bullish) 200-candle MA located just above the $8,628 (38.2 percent Fibonacci retracement, seen in the daily chart). However, the moving average support may hold ground for a few hours as the relative strength index (RSI) shows oversold conditions.
The 50-hour MA, 100-hour MA, and 200-hour MA are trending south and positioned one below the other in favor of the bears. Yet, the RSI on the 60-minute chart also shows oversold conditions. So, a minor corrective rally cannot be ruled out.
- Bitcoin will likely break below $8,628 (38.2 percent Fibonacci retracement), signaling the end of the rally from the April 1 low of $6,425 and may fall to $8,282 (50-day MA) at the weekend.
- BTC could revisit $9,000 as indicated by the oversold conditions 0n the 4- and 1-hour charts. That said, upticks will likely be short-lived as indicated by generally bearish setup.
- Bearish invalidation scenario: A rebound from the mildly bullish 200-candle MA located at $8,628 in 4-hour chart and a close above 10-day MA of $9,390 would abort the bearish view.
Bitcoin and chart image via Shutterstock
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.