Recent CoinDesk analysis
According to a CoinDesk article posted earlier today the bitcoin price pull back for recent highs above $8,500 is beginning to look like a short term bear market according to technical data. On the Bitfinex exchange, the BTC price fell to a two-week low of $7,282 earlier today and at press time, 11:09 UTC, was trading at $7,350 down 3 percent over 24 hours.
The sell-off from the recent high of $8,507 had shown signs of ending near $7,455 on Wednesday which raised prospects of a run back to $8,000. But on Thursday, buyers failed to appear and the price was pushed down to two-week lows.
When the article went to press, the bitcoin price was finding acceptance below a key support level of $7,455 and has lost 40 percent of its recovery in a rally from $5,755 up to $8,507. Yesterday, the price also closed below the support level of the 100-day moving average (MA). Bitcoin appears to be entering a short-term bear market.
Chart analysis
Price chart analysis shows that BTC’s price could drop further to $7,130
As mentioned, BTC closed yesterday below the 100-day MA an indicating of a short-term bearish reversal. There was also a bearish crossover between the 5-day and 10-day MAs and also a downside break of the ascending trend line by the relative strength index (RSI).
The 100-day MA had acted as a stiff resistance before being taken out on July 23rd. Bitcoin had rallied by $800 dollars on the following day indicating the 100-day MA is a key technical level. The bears no doubt are optimistic as yesterday BTC dropped below this key support level. It also has dropped below $7,455 which was a good support level earlier in the week.
Technical indicators now favor a bearish market for the short term at least. A further drop could happen.
The four-hour chart shows the relative strength index hovering below 30 indicating an oversold condition and the chart shows a bullish divergence of the RSI indicating a minor rally to $7,583 to $7,600 is possible but the gains are likely to be short-lived because of the bearish setup on the daily chart.
CoinDesk’s outlook
Based on its technical analysis CoinDesk predicts: “Bitcoin’s close below the 100-day moving average (MA) on Thursday has confirmed a short-term bullish-to-bearish trend change and opened the doors to $7,130 (50 percent Fibonacci retracement of the rally from the June 24 low of $5,755). A minor corrective rally to $7,600 cannot be ruled out, courtesy of the oversold conditions reported by the 4-hour chart. Only a convincing move above $8,000 would allow the bulls to dominate the proceedings.”
Present situation
According to CoinDesk data bitcoin opened yesterday at $7,603 well below $8,000. Its high was only $7,701 still well below the $8,000 level. The price opened today at $7,535 below its previous opening. It hit a low so far of $7,290. At 19:47 UTC the price was at $7,394. The predicted dip to $7,130 has not yet happened but the price is much closer to that than the move above $8,000 that would indicate a bullish trend. There are just over four hours left in the day. The present price of BTC can be found here.
