Bitcoin tumbled yesterday, breaking decisively below the psychological round figure of 10000. The fall came after the price hit the downside resistance line drawn from the high of August 6th, and was temporarily stopped by the 9440 support level, defined by the low of August 15th. The crypro rebounded somewhat from there, but the bears jumped back into the action from near 9715 and pushed the price back down. In our view, the latest slide, combined with the fact that Bitcoin is trading below all three of our moving averages, paints a cautiously negative short-term picture.
At the time of writing, the cryptocurrency is trading slightly below 9440 and if the bears are strong enough to stay in the driver’s seat, we may experience extensions towards the 9070 zone, which provided strong support on July 17th and 28th. If, this time, it fails to stop the price from drifting further south, then we could see a test at around 8850, near the low of June 16th.
Taking a look at our short-term momentum studies, we see that the RSI just touched its toe below 30 and still points south, while the MACD lies below both its zero and trigger lines, pointing down as well. These indicators detect strong downside speed and corroborate our view for some further near-term declines.
In order to abandon the bearish case, we would like to see a break above yesterday’s high of 10260. This would also bring the price above the aforementioned downside line and could pave the way towards the high of August 26th, at around 10590. Another break, above 10590, may allow advances towards the 10920 hurdle, marked by the high of August 20th.
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