$3K Ahead? Bitcoin Price Bounce Is Again Losing Steam
Bitcoin (BTC) still has the potential to drop towards $3,000, despite a minor bounce from 15-month lows seen on Friday.
The leading cryptocurrency by market value picked up a bid at $3,210 three days ago – a level last seen in September 2017. The ensuing corrective bounce, however, seems to have run out of steam, as bitcoin is currently trading at $3,470 on Bitstamp – down 4 percent from yesterday’s high of $3,633.
It’s worth noting that prices are currently down more than 80 percent from the record high of $20,000 reached last December. Further, BTC has depreciated close to 47 percent in the last month, forming record oversold conditions.
Even so, BTC is struggling to post a notable price bounce, which indicates bearish sentiment is still strong.
As a result, the cryptocurrency is likely to remain on the defensive in the short-term, at least. Notably, the 3-day chart, which can offer a better picture of the broader market trend than the daily and intra-day charts, is indicating room for a drop below the psychological support of $3,000.
As seen above, the previous three-day candle closed below support at $3,463 (low of multiple three-day candles in September 2017), validating both the recent high-volume sell-off from $6,200 and the bearish lower-high pattern carved out along the downward sloping 5-candle moving average (MA) over the last few days.
Further, both the recent “death cross” crossover between the 50- and 200-candle MAs and the steeply descending 10-candle MA are indicating a bearish setup.
As a result, BTC has potential to test $2,972 (September 2017 low) in the near-term.
Over on the 4-hour chart, BTC is struggling to cut through the descending trendline hurdle (marked in yellow), currently at $3,540. A break above that level could yield a stronger corrective rally to $3,800 (falling trendline hurdle).
The RSI, however, has already dived out of the ascending trendline, signaling bearish conditions. BTC, therefore, may have a tough time clearing the immediate resistance at $3,540.
- BTC risks falling to $2,972 (September 2017 low) in the near-term, according to the 3-day chart.
- Prices could rise to $3,800 if resistance at $3,540 is cleared in the next few hours. The bearish outlook, however, would only be invalidated if the descending 10-candle MA on the 3-day chart, currently at $4,250, is scaled.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View