For many crypto currency enthusiasts, the path for bitcoin least resistance points to the downside. As at press time on Friday, Bitcoin was trading at $6,340 on crypto exchange Bifinex – this indicates a drop by 3 percent from the initial high of $6,550 enjoyed during the day. Majority of the loss came amidst a dramatic drop of over $100 within an hour just before press time.
While market sentiments has been particularly bearish in the last couple of days, the minor recovery from the previous day’s low of $6,300 was attributed to oversold conditions reported by the short duration relative strength index (RSI) yesterday. More interestingly, the loss experienced yesterday is an indication that the bearish sentiment is still very strong and the minor pop is likely to force more sell off in the coming days.
While indicators over the last three weeks seem to have pointed towards a bullish sentiments for Bitcoin, recent losses has now given bears the upper hand. Consequently, a drop to $6,000 (February low) cannot be ruled out
Looking at the chart above, the hourly candle clearly confirms a downside break of the ricing rising wedge pattern. This signals an end to the bullish technical recovery. Similarly, major moving averages (MAs) – 50-hour, 100-hour, and 200-hour – seem to be heading south signaling that bears are still very much in control. Also, the RSI at the moment is aligning with the bears, having dropped below 50.00.
A look at the daily chart indicates that BTC experienced a rising wedge breakdown on Wednesday, indicating the rally from the Aug. 14 low of $5,859 has ended and the bears have regained control.
More so, the negative price action experienced yesterday has further boosted the bearish sentiments of the market. Again, investors must pay a close attention to the line chart as a pennant breakdown may force the price of BTC below $6000 before the week closes.