bitcoin (BTC) bears have come out victorious in the two-day tug of war with the bulls and may push prices down to $7,000.
The cryptocurrency has been restricted to a narrow range of $8,140 and $7,700 since March 27, according to Bitfinex data. At one point in time , it appeared as though the bulls had found their footing, thanks to an upside break of the descending trendline and a bullish triangle breakout.
Yet, bitcoin failed to chew through the supply around the $8,000 mark in the U.S. session, allowing the bears to take over. Accordingly, BTC fell below $7,700 at 04:00 UTC today.
As of writing, BTC is changing hands at $7,530 on Bitfinex. Further, the average price across leading exchanges, as represented by CoinDesk’s is seen at $7,540 – down 5 percent compared to the previous day’s close of $7,937 (as per UTC).
4-hour chart
The downside break of the sideways channel signals continuation of the sell-off from the March 24 high of $9,050. The relative strength index (RSI) shows a bear flag breakdown, which adds credence to the bearish set up on the price chart.
So, BTC looks set to test $7,260 (target as per the measured height method) to $7,240 (March 8 low). Additionally, the 78.6 percent Fibonacci retracement of the rally from the Feb. 6 low to Feb. 20 high stands at $7,239 as seen on the daily chart below.
Daily chart
The 5-day moving average (MA) and 10-day MA are biased to the bears (sloping downwards). The RSI has also become bearish.
As per the daily chart, BTC is stuck inside a falling channel (lower highs and lower lows) and could drop to $6,100-$6,000 (falling channel support) if the cryptocurrency finds acceptance below the immediate support at $7,240. That said, the weekly chart (not shown) shows, around $6,600.
The much-feared and overhyped could happen today if BTC falls to $7,000 and might accentuate the losses. However, as discussed yesterday, the death cross could be a for the bulls, as the bearish signal is often soon followed by an upturn.
View
BTC looks set to test $7,240 and could possibly break lower to $7,000. Such a move will likely push the 50-day MA below the 200-day MA (the death cross).
Being a lagging indicator, the death cross is unlikely to do significant damage, thus BTC may be able to avoid a weekly close below .
On the higher side, only a daily close (as per UTC) above $8,135 (upper end of the sideways channel) would abort the bearish view.
image via Shutterstock
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Published at Thu, 29 Mar 2018 09:50:42 +0000
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