Bitcoin Remains On the Defensive With Price Below $8K

Bitcoin is teasing a downside break of its recent trading range, having again faced rejection above $8,000 today.

AccessTimeIconMay 22, 2019 at 1:15 p.m. UTC
Updated Sep 13, 2021 at 9:13 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

View

  • BTC has traded in a narrowing price range over the last 48 hours, aborting the immediate bullish view put forward by Sunday’s double-digit gains.
  • A range breakdown, if confirmed, would allow a price drop toward $7,200. That looks likely with multiple signs of bullish exhaustion on the daily chart.
  • The outlook, however, would again turn bullish if the contracting triangle ends with a bullish breakout. In that case, the price could rise to $8,500.

Bitcoin is teasing a downside break of its recent trading range, having again faced rejection above $8,000 earlier today.

The cryptocurrency market leader jumped more than 12 percent on Friday, reviving the case for a potential break above the June 2018 high of $8,500.

The bullish momentum, however, fizzled out on Monday with prices falling from $8,200 to $7,581. Further, BTC remained on the defensive Tuesday, with prices clocking daily highs and lows within Monday’s trading range.

Essentially, BTC's narrowing price range has created a contracting triangle over the last 24 hours, neutralizing the immediate bullish view put forward by Sunday’s rally.

The case for notable price pullback, suggested by repeated bull failures at $8,300 would strengthen if the indecision represented by the contracting triangle ends with a downside break.

As of writing, the lower edge of the trading range is seen at $7,805, while bitcoin is trading at $7,824, down 1.6 percent on the day.

While the short-term prospects are looking a little bleak, the long-term outlook remains constructive, with cryptocurrency reporting nearly 50 percent gains on the opening price of $5,267 seen May 1. Further, BTC is trading well above the 200-day MA, currently at $4,485.

4-hour chart

btcusd-4-hour-chart-11

A 4-hour close below $7,805 would confirm a triangle breakdown and open the door for a drop to $7,200.

Supporting the bearish case is the moving average convergence divergence (MACD) histogram, which has turned negative.

Further, the Chaikin money flow index is losing altitude, indicating weakening of buying pressure.

Daily chart

btcusd-daily-chart-24

With prices trading well below $8,200, the bearish hammer (or hanging man) candle created on Monday is still valid. That candlestick is widely considered an early warning of a bullish-to-bearish trend change, as discussed yesterday.

Add to that, the three rejections at $8,300 seen in the last eight days, as well as the multiple failures to hold onto gains above $8,000, and the cryptocurrency appears overdue for a correction.

As a result, the narrowing price range looks likely to be breached to the downside.

As mentioned, a range breakdown would open the doors to $7,200. A UTC close below that level would expose the historically strong support of the 30-day moving average (MA), currently at $6,413.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; technical charts by Trading View

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.