Bitcoin dropped to four-day lows below $9,200 on Monday and now looks set to explore levels below the $9,000 mark, the technical charts indicate.
Yesterday’s downwards move meant the cryptocurrency closed below the 10-day moving average (MA) – signaling short-term bullish invalidation – having failed to beat the key inverse head-and-shoulders neckline resistance over the weekend.
As of writing, BTC is trading at $9,357 on Bitfinex – largely unchanged on the day, but down 6.3 percent from the recent high of $9,990. Worryingly for the bulls, the price chart analysis indicates the losses could be extended further over the next 24 hours.
1-hour chart
The inverted flag (also known as a bear flag) breakdown suggests the sell-off from the high of $9,990 has resumed and BTC could drop to $8,865 (target as per the measured height method – pole height subtracted from breakdown price).
The momentum studies also favor the bears, with both the 50-hour moving average (MA) and 100-hour MA showing a bearish bias (sloping downwards). Further, the 50-hour MA looks set to cut the 200-hour MA from above (bearish crossover).
Daily chart
As noted earlier, BTC closed below the 10-day MA yesterday, signaling that the rally from the April 1 low of $6,425 has made a temporary top at $9,990.
Further, BTC’s attempt to retake the 10-day MA failed earlier today and the 5-day MA has adopted a bearish bias.
As a result, the cryptocurrency looks likely to find acceptance below the ascending trendline (drawn from the April 18 low and May 1 low) and possibly drop below the $9,000 mark in the next 24 hours or so.
View
- BTC could drop to $8,865 (bear flag target).
- A daily close (as per UTC) below the 100-day MA located at $8,897 would confirm a short-term bullish-to-bearish trend change and could yield a deeper drop to $7,787 (61.8 percent Fibonacci retracement of the rally from $6,425 to $9,990).
- On the higher side, a move above $9,678 would put $10,000 back on the map. That said, only a daily close above $10,000 would revive the bullish outlook.
Fairground ride image via Shutterstock
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Source: CoinDesk.com
