In the last 24 hours, the leading cryptocurrency, Bitcoin (BTC) has been on the defensive having breached crucial support on Monday. And should the market continue in this direction, Bitcoin could suffer a deeper drop, no thanks to a bearish crossover between key moving averages.
As at the time of writing this report, Bitcoin is exchanging for $6,420 on Bitfinex, representing a 3 percent fall in price in the last 24 hours.
Although the bullish break above $6,600 we witnessed on Friday indicated that the price of Bitcoin (BTC) could rally towards the psychological resistance of $7,000, this wasn’t to be as the rally in other cryptocurrency assets over the weekend fizzled out.
And while Bitcoin managed to hit 17-day highs above $6,800 on Saturday, the price crashed below $6,600 yesterday, effectively putting an end to its bullish outlook.
More interestingly, the pullback from last weekend’s high of $6,841 to today’s low of $6,370 gives credence to the bearish sentiments put forward by the negative moving average crossover on the monthly chart. Therefore, Bitcoin risks falling to the major support at $6,000 in the coming days.
A look at the daily chart indicates that Bitcoin has found acceptance below the double bottom neckline of $6,600. Although this signifies a bullish failure and looks encouraging, nonetheless, it isn’t enough to call a bearish failure.
More importantly, BTC is still locked in the large pennant, and if we are to see a UTC close below the lower edge of the pattern, then that would signal a revival of the sell-off from May highs above $8,500.
Be that as it may, the chances of a downside break remains very high.
Looking at the monthly chart, you can see that the 5-month exponential moving average (MA) crossed the 10-month EMA. Again, Bitcoin’s inability to hold above the moving averages over the weekend gives some strong support to the negative MA signal.
- BTC’s drop in price below $6,600 in the last 24 hours has put an end to the immediate bullish outlook.
- More so, if we are to see a break of the pennant pattern in the daily chart, then BTC is likely to visit the June low of $5,755.
- Again, the bearish crossover between the 5-month and 10-month shows that BTC will find acceptance below the next significant support at $6,265 in the coming days.