- Bitcoin continues with the lower high and lower pattern with the descending channel.
- The immediate downside is protected by the 50-day MA addition to $8,400 and $8,000 support zones.
Bitcoin took a breather from the downtrend over the weekend following Friday’s flash drop. Bitcoin failed to sustain gains above $9,200 and embarked on a journey of breaking down support areas. For instance, on breaking below $9,000, the short-term support at 8,050 and $8,800 caved in allowing losses to extend towards $8,600.
Following a shallow recovery over the weekend, the trading was dominated by consolidation movements. BTC/USD at some point stepped above $9,000 but gains were capped under $9,200. The prevailing trend is marred with declines whereby Bitcoin is re-targeting the same lows reached on Friday.
BTC/USD daily chart
For now, the price is teetering at $8,691 and is between the moving Average support and resistance. On the downside, Bitcoin is supported by the 50-day MA at $8,549.43. On the upside, the largest crypto’s movements are limited by the 100-day MA at $9,459.
The most conspicuous feature is the falling channel. Bitcoin has tested both side of the channel numerous times. However, the price continues to form a lower high and a lower low pattern. The extent that this channel will take Bitcoin is not certain.
From a technical perspective, Bitcoin is likely to pull the downtrend further. The RSI, for example is heading towards 40 and 30 after breaking below 50 (the average). If bulls manage for a recovery, gains to the upside will remain capped under $9,000. If the RSI hits oversold conditions (characterized by a further slump towards $8,000) then Bitcoin buyers can easily forge a reversal movement above $10,000.
Spot rate: $8,700
Support: 8,400 and $8,000
Resistance: $8,800 and $9,000
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John is a talented writer with over two years of experience actively contributing to the cryptocurrency industry by providing credible, interesting and easy to read the content. His main focus is on cryptocurrency price analysis and industry news coverage. Lets follow him on Twitter at @jjisige