Bitcoin (BTC) bears have unraveled the minor rally in prices since Saturday and are now looking to pull the cryptocurrency below the $8,000 mark, the technical charts indicate.
The bears’ comeback comes after bitcoin saw minor gains after the May 12 low of $8,204, but the bulls repeatedly failed to cut through the key falling trendline hurdle. As a result, bitcoin fell to a 3.5-week low of $8,100 on Bitfinex earlier today.
As of writing, BTC is changing hands at $8,366 – down 4.7 percent in 24 hours.
The above chart shows that bitcoin has dipped below the 50-day moving average (MA), currently located at $8,290. As discussed yesterday, a close (as per UTC) below the 50-day MA would signal resumption of the sell-off from the recent high of $9,990 and could yield deeper sell-off to $7,800.
The rejection at the descending trendline hurdle and a drop to $8,100 has reinforced the bearish view put forward by the short-term moving averages (5-day and 10-day), which are sloping downwards in favor of the bears.
The retreat from $8,884 to $8,100 has also established a falling top (lower highs pattern) – a (you guessed it) bearish setup. While the 10-day MA has crossed the 100-day MA from above (bearish crossover), and the relative strength index (RSI) is also biased bearish (below 50.00 and falling).
As a result, there is a high probability that bitcoin will now go on to close today (as per UTC) below the 50-day MA and confirm a bear revival.
The bad news (for the bulls, at least) continues in the 4-hour chart. The downside break of the expanding channel (bearish breakdown) indicates the sell-off from the May 5 high of $9,990 has resumed and could yield a drop to $7,524 (target as per the measured height method).
Note, the major moving averages (50, 100 and 200) are sloping downwards (bearish).
- BTC will likely close below $8,290 (50-day MA) today and confirm a bear revival.
- The cryptocurrency looks set to test support at $7,787 (61.8 percent Fibonacci retracement of the rally from April 1 low to May 5 high) and could go as low as $7,524 (expanding channel breakdown target) in the next 24-48 hours.
- An unexpected break above $8,884 would abort the bearish view.
Bear graffiti image via Shutterstock