This is indicated by technical charts unless the bulls are able to defend the key moving average (MA) support. 24 hours ago bitcoin looked ripe for a pullback amid signs that the bull run was exhausted as it reached the key resistance level of $6,800. The drop to $6,436–the low at time of posting- is not surprising but boosts the odds of a close that would be below the 10-day moving average. The short-term moving average is still biased towards the bulls. A strong defense of the 10-day moving average could see the price test the $7,000 level.
When the article was posted bitcoin was trading at $6,460 on Bitfinex a drop of 5.5 percent from the high of $6,839 reached over the weekend.
Chart analysis
The daily candle had already breached the 10-day moving average support level of $6,585. Only a close below that level would abort the short-term bullish view. The relative strength index and the breakout from a falling channel last week are also bearish signs. However, the short duration charts are already tending towards the bears, so the probability of the BTC price closing below the $6,585 level is high.
The 4-hour chart shows the rising channel breakdown indicating that the corrective rally from the June 24 $5755 low has ended. The relative strength index (RSI) is now below 50 a bearish sign. The price has also breached the support level of the 200-candle moving average another development favoring the bears.
CoinDesk outlook
On the basis of their analysis CoinDesk’s view is: “The bearish breakdown on the 4-hour chart indicates BTC could test the 50-candle MA, currently located at $6,381, and could close below the 10-day MA today, confirming a short-term bullish invalidation. Acceptance below $6,381 (50-candle MA) would expose 6,000 (February low and major psychological support).The bulls may build steam for a fresh move higher towards $7,000 if BTC closes above 10-day MA today. ”
Present situation
Bitcoin had a sharp upswing less than two hours before the close to $6,782 but then experienced a sharp drop. It ended up closing at $6,302 below the 50-candle MA mentioned in the CoinDesk analysis invalidating the bullish trend. It is also below the $6,585 level another sign the bullish trend is at an end. At 1:19 UTC BTC was trading at $6,376 up substantially from the open already a gain of over one percent. The present price of bitcoin can be found here.
So far today the direction favors the bulls but the day is just starting and we could see the price break down below the $6,000 level as the bearish signs would indicate.
