Bitcoin drops close to $8,000 level as crypto markets decline

Posted May 16, 2018 by Ken Hanly
Over the past day the price of bitcoin has been dropping considerably. From a high of $8,824.17 on Tuesday to a low of just $8,292.10 just after midnight on Wednesday, a 6 percent decrease. However, it is still above the $8,000 level.
At a Bitcoin conference in New York.
At a Bitcoin conference in New York.
Andrew Burton, Getty/AFP/File
Bitcoin reached a high of just under $20,000 just before Xmas last year. It started to drop in price as early as last January. It is now less than half of what it was and appears unable to regain ground at present.
The CoinDesk analysis
Bears seem to have taken over after a minor rally last Saturday. Technical charts indicate that the price of bitcoin (BTC) may drop below the $8,000 level.
There were some minor gains after the May 12 low of $8,204 but there was no cut through the falling trend line hurdle. Earlier on Wednesday the price fell to a 3.5-week low of just $8,100 on Bitfinex. As the article went to press the price was $8,366 down 4.7 percent in just 24 hours. The price stayed above the $8,100 level for the rest of the day and closed at $8,340.30.
The daily chart shows that the price of BTC had dipped below the 50-day moving average (MA) currently at $8,290. This indicates a resumption of the sell-off from a recent high of $9,990 and this could result in a deeper sell-off to $7,800. The inability to rise above the descending trend line and the drop to $8,100 strengthens the bearish view. This view is also supported by the fact that both the 5-day and 10-day moving averages are sloping downward.
The retreat from $8,884 down to $8,100 has also established a falling top or lower highs pattern which is also a bearish sign. The relative strength index is also bearish at below 50 and trending lower.
The analysis shows a high probability that the close today will be below the 50-day MA of $8,290. However, this did not happen as the close today was about fifty dollars above that level.
The four-hour chart reinforces the bearish trend showing that the sell-off is continuing and could yield a drop to as low as $7,254. The major moving averages are now all sloping downwards another bearish sign.
The CoinDesk prediction
The article outlook is as follows: "BTC will likely close below $8,290 (50-day MA) today and confirm a bear revival. The cryptocurrency looks set to test support at $7,787 (61.8 percent Fibonacci retracement of the rally from April 1 low to May 5 high) and could go as low as $7,524 (expanding channel breakdown target) in the next 24-48 hours. An unexpected break above $8,884 would abort the bearish view."
The present situation
The close on Wednesday was $8,340.30 above the 50-day moving average (MA) but the price never came close to the $8,884 level that would abort the bearish view. At a little over two hours into May 16 UTC the price was at $8,365.96 up about 25 dollars from the open. It remains to be seen if the price will continue to recover or drop down below the $8,000 level. So far it seems to be trading in a narrow range still close to the $8,000 level. The present price can be found here.
The entire cryptocurrency market has declined
Overnight the total market cap of cryptocurrencies dropped more than $30 billion from $408 billion to just $377 billion. Major currencies such a bitcoin, bitcoin cash, EOS, and Cardano dropped in the 5 to 13 percent range. Bitcoin cash dropped 11 percent and EOS 13.5 percent.