Bitcoin Bulls Eye $6K Bottom After 4-Month Low

June 13, 2018
27 Views

Bitcoin is still looking south, having hit four-month lows today, but the bearish momentum may wane due to short-term oversold conditions, the technical charts indicate.

More bears joined the party in the U.S. session Tuesday after the cryptocurrency failed to cross twin resistance at $6,859 (50-hour moving average (MA) and 23.6 percent Fibonacci retracement). As a result, the price fell to $6,370 on Bitfinex today, the lowest level since Feb. 6. At press time, bitcoin was slightly higher at $6,453.

The drop to the four-month low has bolstered the already bearish technical setup and raised the odds of a sell-off to $6,000 (February low).

However, the bears may take a breather over the next day or two, as the relative strength index (RSI) is hovering at the key bullish reversal zone, and bitcoin could hold around support at $6,400 or possibly see a minor corrective rally.

Daily chart

Currently, the RSI is holding below 30.00. Historical data shows BTC stages a “V”-shaped recovery every time the RSI drops to or below 30.00. However, things may pan out differently this time, as long-term technical charts are biased to the bears.

Weekly chart

The downside break of the pennant (bearish continuation pattern) indicates scope for a drop below the February low of $6,000.

Further, on the weekly chart, the RSI fell below key support of 53.00 in February, signaling a long-term bullish-to-bearish trend change and is currently hovering below 50.00 (still in bearish territory). Clearly, the bears now have more say in determining the BTC/USD exchange rate.

So, while the cryptocurrency may make a brief rally, courtesy of the oversold conditions, a major recovery will likely remain elusive.

View

  • Longer term, BTC is still eyeing a drop to $6,000 amid a generally bearish market.
  • In the next 48 hours, bearish momentum may weaken and prices could revisit the 5-day MA, currently located at $6,800.
  • The probability of a major “V-shaped” recovery is low.
  • Only a daily close above 10-day MA, currently seen at $7,214, would signal bearish invalidation.

Bitcoin on chart image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

https://www.coindesk.com/bitcoin-bulls-eye-6400-defense-after-four-month-low/

You may be interested

Chinese Mining Hardware Manufacturers to Fall Under US Tariff Increases
Bitcoin
Bitcoin

Chinese Mining Hardware Manufacturers to Fall Under US Tariff Increases

btcethereumadmin - October 18, 2018

Major Chinese mining hardware manufacturers could fall under new U.S. tariffs on Chinese-manufactured goods, reaching as high as 25 percent.…

Canadian Firm to Build Blockchain-Based Supply Chain Platform for Cannabis Industry
Blockchain
Blockchain

Canadian Firm to Build Blockchain-Based Supply Chain Platform for Cannabis Industry

btcethereumadmin - October 18, 2018

Diversified crypto and blockchain firm DMG Blockchain will develop a blockchain-powered platform to manage supply chains in the Canadian marijuana…

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Stellar, Litecoin, Cardano, Monero, TRON: Price Analysis, October 17
Altcoin
Altcoin

Bitcoin, Ethereum, Ripple, Bitcoin Cash, EOS, Stellar, Litecoin, Cardano, Monero, TRON: Price Analysis, October 17

btcethereumadmin - October 18, 2018

While institutional investors take their time to enter the market, is it worthwhile to buy and hold or is there…

Leave a Comment

Your email address will not be published.