Bitcoin Bears In Charge But Indecision Could Spur Rally
While the odds are still stacked in favor of bitcoin's bears, marketplace exhaustion may have provided a chance for a brief rally.
![bitcoin and handcuffs](https://www.coindesk.com/resizer/bubH1XtBJ7QOb4oDXc8swuly4Q4=/567x378/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/RHML2WZ42ZBVHPIVTMIX6YLQPI.jpg)
While the odds are still stacked in favor of bitcoin's bears, a level of indecision looks to be creeping in, according to the technical charts.
The cryptocurrency fell to a 6.5-week low of $7,142 on Bitfinex earlier today, having breached the 50-week moving average (MA) support for the first time since 2015.
Amid the continued drop in prices, though, the charts show a doji candle formed yesterday, indicating that the bears may be running out of steam and a short-term rally could be on the cards.
As of writing, BTC is changing hands at $7,210 – down 16.58 percent from the last Monday's high of $8,644.
4-hour chart
![btc-4hour-3](https://www.coindesk.com/resizer/Ww1hLLY-lF_STSP8zm-SEE9B7xY=/560x254/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/A5QUCIW6J5ELBHJHCRXHVA73EM.png)
The pennant breakdown, a bearish continuation pattern, on the 4-hour chart indicates the sell-off from the last Monday's high of $8,644 has resumed and opened the doors to $6,800 (target as per the measured height method: pennant range subtracted from breakout price).
The 50-candle, 100-candle, and 200-candle moving averages (MAs) are aligned in favor of a further drop in prices.
Daily chart
![dailyu](https://www.coindesk.com/resizer/cvRZkXpKHP7mWc2zDPXP0Ip6q2Y=/560x254/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/MSDEAXDKRNF6NBOZFQMLEAGKTA.png)
On the daily chart, the 5-day and 10-day MAs are trending south, indicating a short-term bearish setup. A series of lower highs and lower lows also indicates the bears are in control.
The relative strength index (RSI) is holding slightly above 30.00, signaling just enough room for another $200 drop in BTC prices.
Weekly chart
![weeklyu](https://www.coindesk.com/resizer/du0KAETyFIe_EaAutsrfxAai33I=/560x254/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/ZYE67RU6XVD2LB4TKV3FKNWLD4.png)
The first weekly close below the 50-week MA in nearly three years only validates the argument that the long-term bull market has ended.
The relative strength index (RSI) has also rolled over in favor of the bears, while the 5-week MA is set to cross the 10-week MA from above, signaling a bearish crossover.
Clearly, BTC is on the defensive, still, there is merit in being cautious as the cryptocurrency created a small doji candle on Sunday (as seen in the daily chart) at the key 76.4 percent Fibonacci retracement level of $7,209, indicating bear indecision in the marketplace. Thus, a minor corrective rally could be in the offing if bitcoin posts gain today (bullish doji reversal).
View
- BTC looks set to test the psychological support of $7,000. Acceptance below that level would expose the April 1 low of $6,425.
- An unexpected close today (as per UTC) above $7,425 (doji candle high) would confirm a short-term bullish doji reversal and allow a minor corrective rally, possibly to $7,800–$8,000.
- Only a convincing move above the weekly 50-MA would abort the bearish view. Meanwhile, a break above $9,990 (May 5 high) would imply a bullish reversal.
Chart image via Shutterstock