Bitcoin (BTC) is currently however becoming squeezed into a tightening array, with support at $6,300 becoming a important level for the bulls to defend, technical charts reveal.
The leading cryptocurrency carved out a short term bottom all around $6,100 earlier this month and crossed resistance at $6,600 last Friday, confirming a double bottom bullish reversal.
Nevertheless, the ensuing rally ran out of steam at highs higher than $6,800. A lot more importantly, selling prices have fallen back again below $6,600 this week, invalidating the bullish setup.
While the rate action witnessed in the last seven days is demoralizing for the bulls, only a move below $7,400 – support of the trendline connecting the Sept. 8 very low and Sept. 18 very low – would validate a bearish revival.
As of producing, BTC is trading mainly unchanged on the working day at $6,480 on Bitfinex.
On the daily chart, BTC has charted a bear flag – a bearish continuation pattern – which suggests the market-off from the month to month superior of $7,429 would resume if the cryptocurrency finds acceptance below the flag support (support of trendline from Sept. 78 lows) of $6,400.
A bear flag breakdown, if confirmed, would open up the doors to $5,400 (focus on as per the calculated move approach). In addition, it would also validate the bearish watch place forward by the damaging crossover amongst the 5-month and 10-month exponential moving averages (MAs).
However, the bears would require to observe warning as the space all around $6,000, which has acted as a strong support in the modern previous, could place the brakes on the market-off.
About on the hourly chart, BTC is by now on the defensive, owning breached the rising channel to the downside. Further more, the 100-hour moving average (MA) has just crossed the 200-hour MA, confirming the path of the very least resistance is to the downside.
As a consequence, the odds of BTC falling below the vital support of $6,300 in the up coming 24 hrs are superior.
- BTC could be in for a greater fall towards the June very low of $5,755 if the flag support of $6,300 is breached.
- On the way lower, BTC could come across strong support all around $6,000. A solid rebound from that level would neutralize the bearish setup.
- On the greater facet, a convincing move higher than $6,588 (past day’s superior) would weaken the bearish circumstance place forward by the hourly chart.
Disclosure: The author retains no cryptocurrency assets at the time of producing.