- 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