- BTC is defensive and may face selling pressure in the run up to the bearish crossover of the average 100- and 200 days.
- Price support is likely to violate the average 50-day near $ 8550 and extended losses against $ 8,000 in the short term.
- Confirmation bears could cross under interim BTC mark, according to historical data.
- A high-volume move above the descending trendline three months, currently at $ 9,200, which is needed to revive the bullish view.
Bitcoin risk of falling below the key support near $ 8.550, with a widely followed indicator bitcoin prices turn bearish tempting first in more than a year.
Cryptocurrency on the market value is currently trading at $ 8610 on Bitstamp, after rising from the 50-day moving average support (MA) at $ 8543 earlier today.
50-day MA has limited downside since 8th of November, but may be broken soon, courtesy of a looming bearish crossover between the average price was great.
Bitcoin 100-day MA (currently at $ 9436) is now starting to trend south and looks set to cross below the 200-day MA (at $ 9,290) in a few days. It would confirm the bearish crossover – the first of the Supreme Court since 17 April 2018.
Experienced traders will argue that the MA crossover is based on past data and lagging indicators. While that is true, BTC has been defensive, having repeatedly failed to break above the bearish trendline 3.5 months in the last three weeks.
cryptocurrency also have found acceptance under the 200-day MA – a barometer of long-term trends. Thus, the bears will come across is likely to increase bearish sentiment and provide another boost prices down.
Cryptocurrency has pulled back from $ 9,300 to $ 8,600 in the last few days, validate the bearish view proposed by some resistance at a trendline connecting the June and August highs.
Relative strength index hovering below 50, indicating bearish bias, while the MACD histogram bars produce deeper below the zero line – also a sign of the strengthening of downside momentum.
Thus, the 50-day MA support at $ 8543 could be breached before the bear cross. Below that level, the next major support is seen at $ 8,000.
Will weaken the bearish case if there is a strong bounce from the 50-day MA, but it seems a tall order now. A high volume UTC close above the trendline down barriers in the $ 9,200 needed for a bullish reversal.
Note that the cross bears confirmation, however, could mark under interim BTC, as has been seen historically.
BTC sell-off ran out of steam near $ 275 two days before the confirmation bears a cross on October 7, 2014, following which the price surged to above $ 400 in mid-October, according to data Bitstamp. Another bears a cross on April 29 the same year followed by consolidation in the range of $ 420- $ 450 and rally to $ 680 by early June.
And in 2018, the price rallied from $ 7,900 to $ 10,000 a level close to 2.5 weeks after the cross bears in mid-April.
At that time, BTC is a better offer in the days ahead of the crossover with the price rose from $ 6,500 to $ 8,500. In such situations, towering bearish crossover hardly received the attention of the market.
Disclosure: The author does not hold cryptocurrency assets at time of writing.
Bitcoin image via Shutterstock; charts by Trading View