Bitcoin Challenges Return to December Lows After Price Drop to $3.5K

After breaching vital support on Sunday, emboldened bears could before long push bitcoin (BTC) prices back toward $3,100.

The cryptocurrency closed yesterday (as for each UTC) at $3,516, invalidating the bullish see put ahead by the larger minimal of $3,566 carved out on Dec. 27.

That transfer also extra credence to the bearish reversal signaled by the 9 % value drop witnessed past Thursday.

Place simply, the bears appear to have regained regulate of the sector soon after a hole of one thirty day period. Moreover, serious oversold situations experienced put a bid under the cryptocurrency at the 15-thirty day period minimal of $3,122 on Dec. 15. The ensuing recovery rally, nevertheless, failed to penetrate the head-and-shoulders neckline resistance of $4,130 past 7 days.

As of creating, BTC is altering arms at $3,530 on Bitstamp, symbolizing a 2 % drop on a 24-hour basis.

Daily chart

As found above, BTC located acceptance below $3,566 (Dec. 27 minimal) yesterday, validating the bearish doji reversal confirmed on Jan. 10.

The 14-working day relative energy index (RSI) is reporting bearish situations at 42.00, owning breached the ascending trendline past 7 days. Additional, the 5- and 10-working day relocating averages (MAs) are trending south, indicating bearish setup.

So, it could be explained that the recovery rally from the December minimal of $3,122 has only finished up recharging engines for a clean sell-off.

3-working day chart

BTC’s tumble back to $3,500 has invalidated the optimistic see put ahead by the a few-working day bullish outside-reversal candle of Dec. 20.

Also, the cryptocurrency’s failure to make a significant value rally inspite of the optimistic divergence of the RSI, confirmed on Dec. 14, implies that the bearish sentiment is still quite robust.

Weekly chart

On the weekly chart, BTC developed a bearish outside-reversal candle – past week’s value motion engulfed the earlier week’s higher and minimal – signaling a resumption of the primary bearish craze, as represented by the downward sloping 10-7 days exponential relocating ordinary (EMA).

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  • BTC could re-examination the 200-7 days MA of $3,266 in the following handful of days and could prolong the decline to the December minimal of $3,122.
  • A weekly shut (Sunday’s UTC shut) below the 200-7 days MA of $3,266 would open up the doors for a further drop below $3,000.
  • Acceptance above the downward sloping 10-7 days MA, now at $3,919, would abort the bearish see.

 Disclosure: The writer holds no cryptocurrency assets at the time of creating.

Bitcoin image via Shutterstock Charts by Investing Check out