Having hit seven-day lows below $9,000 this morning, bitcoin (BTC) is looking decidedly weak.
The cryptocurrency fell to $8,980 on Bitfinex a few hours ago and was last seen changing hands at $9,080 – down 1.13 percent from the previous day’s close (as per UTC) of $9,184.
The downwards move does not come as a surprise, however, with the bear flag breakdown witnessed yesterday opening the doors for a fall to $8,865.
Now, unless the bulls can make a defense of support at $9,055 (seen in chart below), the cryptocurrency risks once more falling below $8,000.
Bitcoin risks a deeper sell-off to $8,652 (April 26 low) if the failure to beat inverse head-and-shoulders neckline hurdle (as seen over the weekend) is followed by a 4-hour close below the trendline support, currently seen at $9,055.
The 50-candle and 100-candle moving averages (MAs) have shed bullish bias (topped out) and BTC is trading well below other key moving averages. Meanwhile, the relative strength index (RSI) is holding well below 50.00 (in the bearish territory), also signaling scope for further losses.
Additionally, the action in the hourly chart below also suggests that BTC is risking a move downwards.
As of writing, BTC is trading on a weaker footing as indicated by the series of lower highs and lower lows, represented by the falling channel (bearish pattern).
The 50-hour, 100-hour and 200-hour MAs are all biased to the bears (trending south). The bear flag breakdown, seen yesterday, also favors a drop below $9,055.
The only factor that might stall the decline is the bullish relative strength index (RSI) divergence. Note that the RSI has not formed lower lows in response to lower lows in prices.
- BTC will likely find acceptance below $9,055 (trendline support in the 4-hour chart) and drop towards $8,652 (April 26 low).
- A daily close (as per UTC) below $8,652 would mean the rally from the April 1 low of $6,425 has ended and the bears have regained control. In this case, BTC could extend the decline to $7,787 (61.8 percent Fibonacci retracement of the rally from $6,425 to $9,990).
- However, an upside break of the falling channel seen in the hourly chart could yield a rally to $9,300.
- Meanwhile, a close (as per UTC) above the 10-day MA, seen today at $9,413 would indicate the pullback from the recent high of $9,990 has ended.
Funfair ride image via Shutterstock
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.