Bitcoin Price Risks Drop Below $9K if Bulls Can’t Muster Rally Soon
(Source: coindesk.com)

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(Original link: coindesk.com)

Nov 7, 2019 at 11:00 UTC markets View Bitcoin’s repeated failure to produce a strong bounce from key support indicates the bullish sentiment has fizzled somewhat. Failure to hold above a bearish MA on the longer-term chart indicates scope for a deeper drop. BTC risks falling to $8,800 in the short-term and may extend the decline to $8,500. A high-volume triangle breakout on a 4-hour chart would be bullish, although that looks unlikely at press time.
Bitcoin is struggling to revive its stalled rally and could soon roll over to deeper support levels below $9,000.
The top cryptocurrency picked up a bid near $7,500 on Oct. 25 and jumped to $10,350 on the following day, according to Bitstamp data. The breakout into five figures, however, was short-lived, as prices quickly fell back below $10,000 on Oct. 28 and have remained largely trapped in a narrow range of $9,600–$9,000 since.
Downside has been restricted so far by the 200-day average – a barometer of long-term market trends. A pullback typically reverses from key support levels like the 200-day MA, especially if volumes are low, as has been the case recently.
So far, however, the cryptocurrency has failed to produce a strong bounce from the support, despite positive seasonality .
Prices jumped more than $400 to $9,586 from the MA on Nov. 4 only to surrender gains on the following day. A similar weak bounce has been observed in the last 24 hours or so with prices rising to $9,450 only to dive back to lows near $9,200.
These shallow bounces indicate bullish sentiment generated by the sharp rise to $10,350 has weakened and the market may test dip demand by revisiting levels below $9,000.
As of writing, BTC is changing hands at $9,170 on Bitstamp, representing a 1.50 percent drop on a 24-hour basis. Daily chart
BTC’s upside has been capped by the trendline connecting June 26 and Aug. 6 lows multiple times in the last few days. Meanwhile, the cryptocurrency has tested the 200-day MA support five times in eight days.
Trading volumes have fallen sharply since the recent drop-off from $10,350. Low-volume pullbacks are often reversed, but a decent bounce continues to remain elusive.
All-in-all, the cryptocurrency looks set for a drop to the former resistance-turned-support of $8,800. Monthly chart
The upper shadow of the monthly candle represents rejection above the 5-month MA at $9,265. A failure to hold above descending averages usually translates into a notable price drop. Major support is seen at the ascending 10-month MA near $8,000. 4-hour chart
The contracting triangle seen above looks likely to be breached to the lower side, as suggested by the daily and monthly indicators.
The ascending 100- and 200-candle MAs, currently at $8,928 and $8,558, respectively, could offer support if a drop out of the zone is confirmed.
The bearish view would be invalidated if the triangle ends with a high-volume bullish breakout. In that case, a retest of $10,000 could be seen.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View
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....