A Technical Look at Bitcoin’s Action in Here
Bitcoin Key support mark is now at $6,900, having failed to capitalize on signs of weakening Bearish momentum Monday.
But, a corrective rally ran into resistance at $7,400 and closed at $7,143, the lowest daily close since 12 April.
Prices continued to fall Tuesday, with Bitcoin marking a 7-wk low at $7,040 in the morning
Currently, Bitcoin is trading at: 7,503.3052,+403.31, or +5.68% as of 6:28a BST, the market is open
The losses signal a continuation of the sell-off from the recent high of $9,990 and indicate room for a fall to $6,900 a level that the Bulls need to defend. If they do not/cannot, prices may go as low as $5,000 sooner rather than later.
The cryptocurrency created a Bearish outside-day candle Monday.
These occur when a high is above the prior day’s high and the low is below the previous day’s low. This means trading Monday started with optimism and ended with pessimism.
The Bearish outside-day usually indicates a Bullish-to-Bearish trend change. But, when looked at Vs the backdrop of Sunday’s Doji, the Bearish outside-day signals revival/continuation of the sell-off from the 5 May high of $9,990.
The above chart also shows the 5-Day and 10-Day MAs are trending South favoring the Bears.
The RSI dropped to 30.00, indicating oversold conditions.
According to the data, Bitcoin climbs every time the RSI on the daily drops to or below 30.00.
It is possible that this historical pattern may not happen this time (and it might too), as BTC’s long-term technical studies have turned in favor of the Bears.
The weekly RSI is below 50.00, it recently closed below the 50-Wk MA for the 1st time since Y 2015, adding to the argument the long-run Bull market is over. And, the 5-month and 10-month MA’s are beginning to look down in favor of the Bears.
As a result of this technical stuff, it may be likely that Bitcoin will fall to support at $6,900 soon, and although it may not happen in the next 24 hrs, as the short-duration chart shows a temporary Bullish pattern has setup.
Bitcoin has created lower lows in the last 48 hours, but the RSI has not followed, and a Bullish divergence as seen here indicates a bounce aka minor corrective rally as is happening now.