- Bitcoin bears swing into action confident of supporting drab technical picture.
- Bitcoin is on the verge of a major breakdown to recent lows around $7,300.
Bitcoin futures trading is getting drab for the longs traders. The failure to breach the $8,800 key resistance level further demoralized the bulls. Recovery continues to look bleak. Besides, the saddening poor technical picture is doing nothing to help improve recovery prospects.
XBT/USD is dancing with $8,800 amid a generally bearish market. The support at $8,500 is holding the bears off. However, the odds against Bitcoin’s recovery are growing with each passing session.
XBT/USD 4-hour chart
The Death Cross
The upside is initially limited by the 200 Moving Average on the four-hour chart. The 200 MA is holding a position at $8,691.50 beneath the shorter term 50 MA. The 200 MA is grinding toward the 50 MA in lieu of an incoming death cross. A death cross occurs when the 50 MA crosses below the 200 MA and signals a breakdown. If the pattern is not averted, Bitcoin will be staring into a swing down movement that could refresh the recent lows around $7,300.
The Falling Wedge Pattern
On the other hand, the formation of a falling wedge pattern could offer the battered bulls some reprieve. For instance, trading above the pattern’s resistance could eventually boost Bitcoin price above $9,000 in readiness for a rally to $10,000 in the coming weeks. However, for Bitcoin, this rally could happen even in a day, reminiscent of October’s rally from $7,300 to levels above $10,500.
In the near-term, the technical picture remains largely negative. Shallow dips will continue on Friday ahead of the weekend trading. The RSI is knocking on the oversold at 30. If the region is breached expect more declines towards $8,000 before a reversal ensues.
Bitcoin BitMEX Price Levels
Index price: $8,543
Volume: $1.8 billion
Open Interest: $869