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- Bitcoin is struggling to produce a stronger price hike, despite defending the 200-meter moving average of the 4-hour chart – a sign of exhaustion on the part of the buyer.
- A breakdown of the bear flag on the 4 hour chart, if confirmed, would open the doors to levels below $ 7,000. The daily chart continues to call a movement below the 50-day average price, which currently stands at $ 6,861.
- A slight rally in the range of $ 8,200 to $ 8,300 could be observed if the average of 4 hours and 200 candles at $ 7,568 again limits the decline.
- A UTC close above the 10-day MA on a downward (bearish) $ 8,284 would invalidate the short-term bearish pattern.
A key technical line held off the sale of the Bitcoin Price (BTC) earlier this week, but so far the rebound has been shallow, with a hike capped around $ 7,900.
The main cryptocurrency by market value started the week on a negative note with prices down 7% on Monday. The sale was extended Tuesday with prices reaching a minimum of $ 7,432 in 2.5 weeks.
The fall below the 200-candle moving average of the 4-hour chart, then $ 7,970, was short-lived, with prices rising to $ 7,900 in the early hours of the European trading session on Wednesday. .
The rebound, however, has stagnated at around $ 7,900 in the last 24 hours. The inability of cryptocurrency to produce a stronger corrective rally despite the defense of crucial support validates the buyer's exhaustion reported by last week's doji candle.
In addition, the price recovery appears to have taken the form of a bearish continuation model on short-term technical charts. Thus, prices could eventually fall back on the support of 200 candles MA, currently set at $ 7,568.
At the time of writing, BTC is changing hands at $ 7,810, which represents a gain of 0.20% over 24 hours.
4 hour chart
BTC has created a bear flag on the 4 hour chart. An acceptance below the bottom edge of this model, currently at $ 7,700, would confirm a flag break – a continuation pattern that typically accelerates the previous downward movement.
This type of ventilation is usually followed by a downward movement of about the length of the "pole" of the flag (the height of the movement of the previous bear), from $ 8,834 to $ 7,432, a decrease of more than $ 1,000.
Thus, a flag distribution below $ 7,700, if confirmed, would theoretically create a margin of maneuver for a decrease to $ 6,800.
The probability that BTC breaks the flag on the lower side is high, as the 50 candle MA is now facing south, which indicates a bearish pattern and seems to have to pbad under MA at 100 candles (bearish cross).
Daily chart
The daily chart shows a bearish bias, with 5 and 10 day MAs declining, the Relative Strength Index (RSI) signaling a bearish divergence and a violation of the upward trend line representing rebound from the lows of December.
In addition, prices closed on Tuesday under the crucial 30-day MA, confirming a bearish turnaround and struggling to record big gains over the former support turned resistance.
The risks are therefore skewed downwards, with the possibility of a 50-day decrease in support from the MA, currently set at $ 6,861, in the short term.
The decline to the 50-day MA, however, could be preceded by a rebound from $ 8,200 to $ 8,300 – that is, if the 200-hour MA at $ 7,568 holds up well and gives a rebound above $ 8,000.
Disclosure: The author does not hold any cryptocurrency badets at the time of writing.
Bitcoin image via the CoinDesk archives; charts by Trading View
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