Bitcoin is looking weaker on charts today, courtesy of a three-day losing streak.
Coindesk’s Bitcoin Price Index has dropped 18 percent in the last three days and extended losses to $13,455 levels today – the lowest level since Jan. 1. As of writing, bitcoin is at $13,830 levels.
Data source OnChainFX indicates the world’s largest cryptocurrency by market capitalization has depreciated by 7.18 percent in the last 24 hours. Bitcoin (BTC) is also down 30 percent from the record high of $20,000 set in December.
As per popular definition, BTC is in a bear phase (more than 20 percent drop from the peak).
Further, the price charts suggests that bitcoin could extend its decline amid bearish indicators.
The above chart (prices as per Coinbase) shows:
- Bitcoin is extending its three-day losses with prices trading below the upward sloping 50-day moving average (MA) around $14,148.
- Bearish continuation pattern: Yesterday’s close at $14,480 confirmed a downside break of the rising wedge (acting as a continuation pattern here)/bear flag pattern. This indicates the bears are in control and could push prices lower to $7,926 (target as per the measured height method – i.e. the difference between wedge high/low subtracted from breakdown point of $14,700).
- The target level derived with the help of the measured height method almost coincides with the support offered by the trendline sloping upwards from Sep. 15 low and Nov. 12 low. On the way down, BTC may find support at $12,500 (Dec. 30 low) and $10,400 (Dec. 22 low).
- The only factor in favor of the bulls is the upward sloping 50-day MA.
BTC looks set to test support at $10,400 in the next couple of days and possibly extend the decline to $8,000–$7,926 levels over the next couple of weeks.
Bullish scenario: Only a close (as per UTC) today above $14,525 (intraday high) would add credence to the upward sloping 50-day MA and abort the bearish view. A close above $14,525 today and a bullish follow-through tomorrow would improve the odds of a return to $17,174 levels (Jan. 6 high).