Bitcoin Risks Slide to $9.5K After Sudden $700 Price Drop
Bitcoin may fall back to recent lows below $9,500, having strengthened the short-term bearish case with a $700 drop earlier today.
![Bitcoin chart red down](https://www.coindesk.com/resizer/B8Th4OQrZgKGxXV9ZJqAPrFJZ2c=/567x352/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/6UJF3VNQNVCPBMR6BLDQRHWTRA.jpg)
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- Bitcoin quickly fell from $10,842 to $10,082 earlier today, confirming a rising wedge breakdown on the hourly chart. The bearish reversal pattern has opened the doors for a retest of $9,467 (Aug. 15 low).
- On the way lower, prices may find support at the 100-day moving average, currently at $9,882. The average served as strong support earlier this month.
- The bearish case would be invalidated if prices rise above $11,000 with high volumes in the next 24 hours. As of writing, that looks unlikely.
- A convincing move above $12,000 is needed to revive the bullish setup, as per the weekly chart.
Bitcoin (BTC) risks falling back to recent lows below $9,500, having strengthened the short-term bearish case with a $700 drop earlier today.
The top cryptocurrency fell from $10,843 to $10,082 in the eight hours to 07:00 UTC, confirming an end of the bounce from the Aug. 15 low of $9,467.
Prices slipped into four digits on Aug. 13 and extended gains to levels above $10,900 on Monday. That was bitcoin's fourth quick recovery from sub-$10,000 levels since the beginning of July.
As a result, some observers are convinced that a new base has been established under $10,000 and the cryptocurrency could soon resume the rally from April's low near $4,050.
While that seems logical, the latest bounce from $9,467 lacked volume support, as discussed yesterday, and was expected to be short-lived.
Hence, the price drop seen today is not surprising and could be extended further, as it marks a downside break of a rising wedge pattern, a bearish reversal setup, created by the recent price rise from $9,467 to $10,956.
As of writing, BTC is changing hands at $10,132 on Bitstamp, representing a 5.46 percent loss on the day.
4-hour chart
![btc-4-hour-chart-10](https://www.coindesk.com/resizer/m-Jf0IP1uY60X8bk4H3tZ2AuDmk=/560x253/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/EUYPQGJNIJBF7BGEMHI2CGMU64.png)
The rising wedge breakdown seen on the 4-hour chart indicates the bounce from the Aug. 15 low of $9,467 topped out at $10,956 on Monday and the sellers have regained control.
It's worth noting that, as per technical theory, the price seen at the beginning of a rising wedge formation becomes the minimum downside target once a breakdown is confirmed. So, a drop to $9,467 could be seen over the next couple of days.
Supporting the bearish case are a below-50 reading on the relative strength index and a bearish reversal on the the moving average convergence divergence (MACD) histogram.
The outlook would turn bullish if prices rise above $11,000 in the next 24 hours, although as of writing, that looks unlikely.
Daily chart
![btcusd-daily-chart-35](https://www.coindesk.com/resizer/wCwVJtEiMIRbeHBsIlkK9vOgJpw=/560x253/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/23AEGZXFDZGJVB64EDHIMSBCSI.png)
On the daily chart, the RSI remains in the bearish territory below 50.00. The MACD is also holding bearish below zero.
Bitcoin has also found acceptance below the 5-, 10- and 50-day moving averages.
So, a drop to the 100-day MA at $9,882 could be seen – a level that served as strong support on Aug. 15 and Aug. 16.
A UTC close below the 100-day MA, if confirmed, would bolster the bearish setup.
Weekly chart
![weekly-chart-3](https://www.coindesk.com/resizer/e1RugTPmE3Ccpb2QLRwRpNlAjoc=/560x253/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/BBTQWKMTBNFARFHVDZERVFSWPQ.png)
BTC's rejection near $11,000 and the subsequent drop to $10,100 has reinforced a bearish crossover of the 5- and 10-week moving averages, currently located at $10,506 and $10,638, respectively.
The MACD histogram continues to produce lower highs and is currently reporting the weakest bullish momentum in six months.
With the path of least resistance to the downside, support at $9,049 (May low) stands exposed.
On the higher side, a weekly close (Sunday, UTC) above $12,000 is needed to revive the bullish setup.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View