Bear Grip Strengthens as Bitcoin Price Nears $10K
Having closed below key long-term moving average yesterday, bitcoin (BTC) prices looks set to explore sub-$10,000 levels.
Prices on CoinDesk's Bitcoin Price Index fell to a low of $10,050.79 yesterday and dipped below $10,000 soon before publishing. At press time, BTC had bounced back to $10,150 levels. The cryptocurrency has depreciated by 11.70 percent in the last 24 hours, according to data source OnChainFX.
On Coinbase's GDAX exchange, BTC hit a five-day low of $10,025 yesterday. The sell-off gathered pace after prices breached strong support at $11,000 (confluence of 100-day moving average (MA) and 61.8 percent Fibonacci retracement). Also, BTC closed (as per UTC) below the 100-day MA for the first time since July.
The dull response from bitcoin highlights the bearish undertone in the markets. The price chart analysis also favors a break further below $10,000 levels.
t is worth noting that in 2017, dips to or below the 100-day MA were short-lived and followed by a sharp rally. For instance, prices closed (as per UTC) below the 100-day MA on Jul. 16 only to recover sharply on the following day. BTC then proceeded to set new record highs by mid-August.
However, things look different this time. To start with, BTC witnessed a sharp recovery from sub-100-day MA levels on Jan. 17, but the follow-through has been weak. BTC faced rejection at $13,000 (weekend high) and closed (as per UTC) below the 100-day MA yesterday. Clearly, the bears appear to be in control.
Also, as seen in the recent past (Jan, 22, Jan. 17, Jan. 16 and Dec. 22), dips below $10,391 (50 percent Fibonacci retracement of 2017 low to 2017 high) have been transient. Again, the level could be breached convincingly this time, courtesy of the bearish chart set up as listed above.