Bitcoin looks set to end its five-month winning streak with prices currently down 9 percent from the monthly opening price of $10,759, according to Bitstamp data.
A low-volume price breakout seen on 4-hour chart indicates BTC may have a tough time scaling key resistance at $10,235 in the next few hours.
Long-term charts retain the bullish bias despite the monthly loss.
A UTC close above $11,120 is needed to revive the short-term bullish outlook.
Bitcoin (BTC) appears on track to end July on a negative note, having logged gains in the preceding five months.
The top cryptocurrency by market value is currently trading at $9,740 on Bitstamp, representing a 9.3 percent drop on the opening price of $10,759 seen on July 1, according to Bitstamp data.
If prices print a UTC close below $10,759 today, then it would be the first monthly loss since January.
The cryptocurrency rallied 11, 8, 28, 62 and 25.89 percent, respectively, in the previous five months. That was the longest monthly winning streak since August 2017, as seen in the chart below.
BTC’s five-month winning streak was preceded by a record six-month losing run.
The 9.3 percent drop seen at press time is the biggest monthly loss since November 2018.
While BTC looks set to end the month in the red, it has rallied by $1,000 in just a few minutes in recent past. For instance, the cryptocurrency jumped from $9,300 to $10,400 in 30 minutes during the U.S. trading hours on July 18.
Further, prices rose from $4,100 to $5,080 in two hours to 06:00 UTC on April 2 this year, confirming a long-term bullish breakout.
So, with the UTC close still 14 hours away, a sudden $1,000 move to levels above the monthly opening price of $10,759 cannot be ruled out.
As of now, however, the technical charts indicate a low probability of a UTC close above $10,759.
BTC’s 4-hour chart shows a descending triangle breakout, a sign the pullback from highs above $13,000 has ended.
The breakout is also backed by the relative strength index (RSI), which is reporting bullish conditions with an above-50 print.
Even so, BTC may not be able to push beyond the bearish lower high of $10,235 on the 4-hour chart, as trading volumes haven’t picked up with the price breakout. A low-volume breakout is often short-lived.
While a negative monthly close looks likely, the long-term outlook will remain bullish as long as prices are held above the 200-day moving average (MA), currently at $6,417.
Also, despite the monthly loss, the bullish structure on the long-term chart remains intact, as seen in the chart below.
Both the falling channel breakout confirmed in April and the ascending 5- and 10-month MAs indicate the path of least resistance is to the higher side.
The RSI is holding well above 50, indicating an intact bull market.
It is worth noting that a similar bearish channel breakout in the final quarter of 2015 paved way for a record rally to $20,000.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View