Bitcoin (BTC) bears have unraveled the minor rally in prices because Saturday and are currently looking to pull the cryptocurrency beneath the $8,000 mark, the technical graphs 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 throughout the key falling trendline barrier. Consequently, bitcoin dropped to a 3.5-week low of $8,100 on Bitfinex before today.
As of writing, BTC is changing hands at $8,366 – down 4.7 per cent in twenty four hours.
The above chart shows that bitcoin has dipped beneath the 50-day moving average (MA), now located at $8,290. As discussed yesterday, a close (as per UTC) beneath the 50-day MA would signal resumption of the sell-off from the latest high of $9,990 and may yield deeper sell-off to $7,800.
The rejection at the descending trendline barrier along with a fall to $8,100 has reinforced the bearish view put forward from the short-term moving averages (5-day and 10-day), which are sloping downwards in favour of the bears.
The escape from $8,884 to $8,100 has also established a falling top (lower highs pattern) – a (you guessed it) bearish setup. Whilst the 10-day MA has crossed the 100-day MA from above (bearish crossover), and also the relative strength index (RSI) is also biased bearish (below 50.00 and falling).
Consequently, there’s a high probability that bitcoin will now go on to close today (as per UTC) beneath the 50-day MA and confirm a bear revival.
The bad news (for the bulls, at least) takes on in the 4-hour chart. The downside break of the expanding station (bearish breakdown) indicates the sell-off from the May 5 high $9,990 has resumed and may yield a fall 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 Apr 1 low to May 5 high) and may go as low as $7,524 (expanding channel breakdown target) at the next 24-48 hours.
An unexpected break above $8,884 would abort the bearish perspective.
Bear graffiti picture via Shutterstock
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