Bitcoin’s (BTC) retreat from the 200-day moving average gathered pace in the last 24 hours, suggesting scope for a drop to $8,000.
The cryptocurrency created a small doji candle at the moving average resistance on Wednesday, signaling indecision among the bulls, Bitfinex data shows. Prices then fell below the key support of $8,752 at 09:00 UTC yesterday, opening the doors for a deeper pullback.
Accordingly, BTC hit a low of $8,333 on Bitfinex earlier today and was last seen at $8,465.
Meanwhile, CoinDesk’s Bitcoin Price Index (BPI), which represents the average of BTC prices on the world’s leading exchanges, is seen at $8,471 – down 2.77 percent from the previous day’s close (as per UTC) of $8,713.
The above chart shows (prices as per Bitfinex) shows:
Despite the bullish 5-day moving average (MA) and 10-day MA crossover, the cryptocurrency failed to cut through the 200-day MA resistance on Wednesday.
A bearish doji reversal (candlestick pattern) indicating the corrective rally from the March 18 low of $7,240 ended at the 200-day MA resistance, also on Wednesday.
The retreat from $9,177 (Wednesday’s high) to $8,333 (session low) has also established another lower high on the price chart (marked by circles).
The relative strength index (RSI) has rolled over into the bearish territory (below 50.00), raising the odds of a further drop in prices.
Clearly, the daily chart favors a drop to $8,000. On the other hand, the scenario is looking somewhat more positive on the short duration charts below.
BTC has built a base along the 200-hour MA, while a bullish RSI divergence is also seen. Hence, prices may revisit $8,752 (former support turned resistance).
Many in the investor community do not expect BTC to rise above $8,700 and predict a retest of $8,000, comments on social media indicate.
However, an upside break of the descending expanding channel could yield a retest of 200-day MA located at $9,223.
The daily chart favors the bears. On the downside, a move below the hourly 200-MA support of $8,355 could yield a downside break of the descending expanding channel, opening the doors for a retest of $7,240 (March 18 low) over the weekend.
However, a minor rally to $8,752 cannot be ruled out, courtesy of the bullish RSI divergence seen on the hourly chart.
Intraday bullish scenario: Acceptance above $8,752 would shift the odds in favor of a rally to $9,223 (200-day MA).
Note that, despite the pullback from the 200-day moving average, the 5-day MA and 10-day MA bull crossover is intact (5-day MA holds above the 10-day MA). Hence, a move above the daily high of $8,721 would bring potential for a rise to $9,200-$9,223.