Bitcoin Drops Below Long-Term Price Support

Bitcoin (BTC) fell below key support above $10,000 earlier today and could suffer a deeper drop, according to price and volume analysis.

The top cryptocurrency by market value violated a trendline representing the recent four-month bull run with a move below $11,017 at 06:30 UTC and went on to a hit a low of $9,897 on Bitstamp.

With the pullback from Saturday’s high of $11,140 to sub-$10,000 levels, BTC has established yet another bearish lower high – the most basic of all bearish technical patterns – on the daily chart.

As a result, the bears are expected to dominate proceedings in the short term. In fact, BTC could fall all the way back to the July 17 low of $9,097, erasing the low-volume bounce from that level to $11,120 seen in four days to July 20.

Popular cryptocurrency trader and mentor Chonis Trading took note of the bearish volume divergence on a 12-hour chart on July 21. A bearish volume divergence occurs when trading volumes drop, creating lower highs as opposed to higher lows (an uptick) on the price chart.

A low-volume lift could be referred to as a “dead cat bounce” – a temporary recovery caused by the unwinding of shorts (profit taking).

And the bitcoin market seems to have experienced a dead cat bounce over the last few days.

A sudden unwinding of shorts on July 19, as reported by bot-powered twitter handle @WhaleCallspushed prices back above $10,000. The cryptocurrency remained bid over the next two days, only to face rejection above $11,000 over the weekend amid weak trading volumes and fell back below $10,000 earlier today.

While volume analysis favors a drop to recent lows, technical indicators are also painting a short-term bearish picture.

As of writing, BTC is changing hands at $9,970 on Bitstamp, representing a 3.5 percent drop on the day…

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