Bitcoin remains looking southwest, having hit four-month lows today, but the bearish momentum could wane due to short-term conditions, the specialized graphs indicate.
More bears joined the party in the U.S. session Tuesday following the cryptocurrency failed to cross twin immunity at $6,859 (50-hour moving average (MA) and 23.6 percent Fibonacci retracement).
Consequently, the price fell to $6,370 on Bitfinex today, the lowest level since Feb. 6. At press time, bitcoin was marginally higher at $6,453.
The fall to the four-month reduced has strengthened the already bearish technical setup and raised the odds of a sell-off to $6,000 (Feb reduced ).
Nevertheless, the bears may take a breather over the following day or two, as the relative strength index (RSI) is hovering at the primary bullish reversal zone, and bitcoin may hold around service at $6,400 or possibly see a slight corrective rally.
Presently, the RSI is holding below 30.00. Historical data shows BTC phases a”V”-shaped recovery each time the RSI drops to or below 30.00. Nevertheless, things may stand out differently this time, as long-term technical graphs are biased to the bears.
The downside break of the pennant (bearish continuation pattern) indicates scope for a fall beneath the Feb reduced of $6,000.
Further, on the weekly chart, the RSI dropped below crucial support of 53.00 in Feb, indicating that a long-term bullish-to-bearish fad change and is currently hovering below 50.00 (still in bearish territory). Plainly, the bears now have more say in determining the BTC/USD exchange rate.
Therefore, whilst the cryptocurrency may make a brief rally, courtesy of the oversold conditions, a significant recovery will likely remain elusive.
Longer term, BTC remains eyeing a fall to $6,000 amid a generally bearish market.
In the next 48 hours, bearish momentum could weaken and prices could revisit the 5-day MA, now located at $6,800.
The probability of a significant”V-shaped” recovery is reduced.
Only a daily close above 10-day MA, now seen at $7,214, could signal bearish invalidation.
Bitcoin on chart image via Shutterstock
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