Bitcoin's Price Pullback Risks Bear Revival Below $6.9K
The bullish mood in the bitcoin market could turn sour if the cryptocurrency finds acceptance below the 100-day moving average.
![Bitcoin](https://www.coindesk.com/resizer/XIeP7HDxeGA4p5CL51w_b-2lQw4=/567x302/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/36YBPKUHTBAMDBVDNJNGXG4F7E.jpg)
Bitcoin (BTC) bulls need to defend key support at $6,905 to avoid invalidation of the short-term bullish outlook, technical charts suggest.
Having hit a peak of $7,139 Wednesday, the leading cryptocurrency is currently trading around $6,920 on Bitfinex – down 2 percent on a 24-hour basis.
The drop does not come as a surprise, however, as the 21 percent rally witnessed in the last two weeks was looking overstretched yesterday.
More notably, the short-term bull case would weaken if BTC finds acceptance below the 100-day moving average (MA) of $6,905.
Daily chart
![btcusd-dailies-4](https://www.coindesk.com/resizer/FbTEbDbtYiZVkus93jNneZXculw=/560x251/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/N4G4VGRDCVHXXGZFWFSUPKZ5IM.png)
BTC created a "spinning top" candle yesterday, which, when viewed against the backdrop of the 21 percent rally from the low of $8,507, likely represents bullish exhaustion.
Looking ahead, a UTC close below the 100-day MA lined up at $6,905 would validate the spinning top candle and shift risk in favor of a downside break of the rising wedge.
Acceptance below the wedge support would confirm a bullish-to-bearish trend change, that is, the rally from the low of $5,859 has ended and the bigger downtrend from the July high of $8,507 has resumed. In this case, BTC could revisit recent lows below $6,000.
Hence, the bulls need to defend the 100-day MA of $6,905 to keep the short-term bullish outlook intact. That may be a tough call, though, as the short duration charts are pointing to an increased risk of further losses.
4-hour chart
![btcusd-4h-charts](https://www.coindesk.com/resizer/kQE1_Jd9jaTzGHdJZK1liJc5EgU=/560x252/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/S26R6N4B6NBJRHPAEPITBJG7TA.png)
As seen in the above chart, BTC has breached the rising trendline in favor of the bears. Further, the relative strength index (RSI) has taken out the ascending trendline support. As a result, the emboldened bears may push the cryptocurrency down to the ascending (bullish) 50-candle MA, currently located at $6,735.
View
- A UTC close below $6,905 would confirm a spinning top bearish reversal and strengthen the odds of a downside break of the rising wedge pattern.
- A rising wedge breakdown would signal a resumption of the sell-off from the July high of $8,507 and could yield a drop to $6,000 (February low).
- A close today above the 100-day MA would keep the bulls in the game and allow a sustained move above $7,200 in the next couple of days.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; Charts by Trading View