Bitcoin's (BTC) reversal of the recent uptrend in prices is gathering pace and a drop into a bearish territory below $6,200 is now a possibility, technical charts indicate.
At press time, BTC is trading at $6,350 on Coinbase, having clocked a five-day low of $6,335 soon before press time, following a sudden $100 drop.
As a result, the support of the trendline from Oct. 11 lows could be breached in the next few hours, opening the doors for a drop below the recent higher low of $6,200 (Oct. 31).
As can be seen above, the cryptocurrency has established a bearish lower highs and lower lows pattern, validating yesterday's bullish channel breakdown.
Further, prices seem to have found acceptance under the crucial 200-hour exponential moving average (EMA) support and the major EMAS – 50, 100 and 200 – are beginning to roll over in favor of the bears.
In particular, the 50-hour looks set to cross the 100-hour EMA from above, bolstering the already bearish technical setup.
The drop below the immediate support of $6,330 (61.8 percent Fibonacci retracement), however, is likely to happen after a minor bout of consolidation, as the relative strength index (RSI) is reporting oversold conditions below 30.00.
Over on the daily chart, the symmetrical triangle breakout and a close above the critical 50-day EMA resistance witnessed earlier this week failed to produce significant price gains.
A failed breakout often ends up putting the bears back into the driver's seat. Hence, a slide to $6,200 could be in the offing.
- A combination of the failed breakout on the daily chart and the bearish setup on the hourly chart indicates that cryptocurrency could soon drop below $6,274 (trendline connecting the Oct. 11 low and Oct. 31 low + 76.4 percent Fibonacci retracement support) and drop below $6,200 (Oct. 31 low).
- A UTC close below $6,200 would invalidate the higher lows pattern seen on the daily chart, shifting risk in favor of a drop to the psychological support of $6,000.
- A bullish revival is seen only above the weekly high of $6,540.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
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