Bitcoin’s (BTC) price is trading in an indecisive manner after hitting 19-day lows below $6,900 on Sunday, but could pick up a bid on acceptance above $7,100, technical studies indicate.
The leading cryptocurrency fell to $6,890 on Bitfinex yesterday – its lowest level since July 17 – before ending the day (as per UTC) on a flat note at $7,025.
The price action indicates indecision in the marketplace, but could also be considered a sign of bearish exhaustion as the market is looking indecisive after a 21 percent slide from the recent high of $8,507.
Now if the bulls are able to push prices above Sunday’s high of $7,090, then the exhaustion among sellers would be confirmed. On the other hand, a slide below the previous day’s low of $6,890 would only make matters worse for the cryptocurrency.
At press time, BTC is trading at $6,975 – down 0.80 percent on a 24-hour basis.
The above chart shows, BTC created a doji candle (indecision) on Sunday at the 50-day moving average (MA) support, making today’s close (as per UTC) pivotal.
A bull doji reversal would be confirmed if BTC closes today (as per UTC) above $7,090 (Sunday’s doji candle high). In this case, a corrective rally to 100-day MA, currently located at $7,474, could be seen.
Meanwhile, a close (as per UTC) below $6,890 (Sunday’s doji candle low) would signal a continuation of the sell-off from the July high of $8,507.
Moreover, the bulls need to capitalize soon on the signs of indecision or bearish exhaustion, otherwise, the focus would quickly shift back to the bearish factors: downward sloping 5-day and 10-day MAs, breach of the key support of 100-day MA last week and a bearish relative strength index (RSI).
Further, BTC’s close proximity to the all-important inverse head-and-shoulders neckline support (former resistance) of $6,820 is another big reason why the bulls need to make a quick comeback.
A break below $6,820 would invalidate the bearish-to-bullish trend change confirmed by the inverse head-and-shoulders breakout on July 17 and would shift risk in favor of a drop below the rising trendline (yellow dotted line).
In any case, the long-term bullish view has been invalidated by BTC’s close at $7,025 yesterday, as seen in the chart below.
BTC closed above the falling channel resistance in the previous week, confirming a long-run bearish-to-bullish trend change. However, the breakout ended up being a bull trap as the cryptocurrency fell back inside the channel last week, invalidating the long-term bullish outlook.
- BTC could rise back to 100-day MA of $7,474 if prices close today above $7,090. That said, the short-term bias would remain bearish as long as the 5-day and 10-day MAs are trending south.
- A close today below $6,890 would increase the risk of a drop below the key rising trendline support, currently seen at $6,700.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; Charts by Trading View
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This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.
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