Bitcoin price analysis shows that BTC has broken bearish through the psychological $8,000 level, with a -1.19% loss against the US dollar over the last 24 hours. Is this just a temporary correction, or could this be the start of a reversing trend? Let’s take a look.
Bitcoin Price Technical Analysis: Market Overview
Bitcoin price [coin_price] appeared to be heading towards new heights this morning, after hitting a new 10-month high at $8,388. The celebrations, however, quickly turned to panic as a series of heavy sell-offs unraveled the asset’s price back down to $7,700.
BTC is now heading towards a bearish double top after failing to close above its previous high on May 11, at around $8,327. This will be a major test of faith for BTC buyers, as a fall below $7,700 could spell doom for the asset’s short to mid-term prospects.
Right now, bullish traders are desperately trying to prop up bitcoin’s declining value, and have so far managed to find refuge along with strong uptrend support.
If this level holds, then we could potentially see buyers launch an upside recovery back towards the $8,300 level. If it fails however, then it is more than likely that confidence will depart from the asset and the uptrend will reverse.
BTC/USD 1-Day Chart
On the 1D BTC/USD chart, we can see that the RSI has started to arc back towards the channel as the uptrend weakens. Buying volume on the MACD histogram is also dropping as selling pressure increases.
At the moment, the 5 SMA (blue line) appears to be providing good overlapping support for the price action as bulls defend the critical $7,800 level.
BTC/USD 4-Hour Chart
On the 4H BTC/USD we can see a worrying contradiction between the price action and the RSI trend. Over the past 4 days, Bitcoin’s price action has been making consistently higher highs, however, on the RSI, the indicator line has made 3 consecutive lower lows (blue arrow). When this happens, it is usually an early sign that the uptrend is losing momentum and a reversal is likely to ensue.
In the last 24 hours, the RSI has continued to fall a further 16% to the 54% mark. Selling volume on the 4H MACD is also showing a marked increase and the 12-MA is diverging further below the 26-MA.
Other bearish signals can also be found on the Bollinger Bands, where candles have now fallen below the central MA for the first time in 10 days.
All eyes are now on the strong support level (white line) which has so far helped to slow Bitcoin’s sliding price action. Bulls will need to regain composure at this level if BTC is to continue its ascend towards new highs. Should bears overcome this support, then we could see Bitcoin tumble down to stronger support at $6,800 before bulls pushback.
Trade Bitcoin (BTC), Litecoin (LTC) and other cryptocurrencies on online Bitcoin forex broker platform evolve.markets.
The views and opinions of the writer should not be misconstrued as financial advice. For disclosure, the writer holds Bitcoin at the time of writing.
Images courtesy of Shutterstock, Tradingview.com