Bitcoin’s consecutive weekly losses and multiple failures at key resistance have shifted risk in favor of a drop to around $8,550 and perhaps as low as $8,000.
Daily chart indicators have turned bearish for the first time in over a month, supporting the case for a deeper decline.
A high-volume move above $9,335 (descending trendline from 2019 high) is needed to revive the bullish view.
Bitcoin is looking south after back-to-back weekly losses and multiple rejections at key price resistance.
The top cryptocurrency by market value fell 2.6 percent and 3 percent in the weeks ended Nov. 3 and 10, respectively.
Importantly, BTC has also failed for three straight weeks to close (Sunday, UTC) above the 3.5-month trendline sloping downwards from the 2019 high of $13,880. Acceptance above that hurdle would have meant a revival of the bull market set in motion by a solid break above $5,000 in early April.
The inability to pass that level (currently around $9,335) has weakened the bullish case put forward by the high-volume rise from $7,300 to $10,300 on Oct. 25–26.
Markets usually test dip demand after multiple rejections at key resistance and bitcoin is already feeling the pull of gravity. At press time, the cryptocurrency is trading at $8,680 on Bitstamp, representing a 1 percent drop on a 24-hour basis.
Losses could be extended further with the 200-day moving average support now breached. The barometer of long-term market trend is currently located at $9,236. Other technical indicators have also turned bearish over the weekend.
BTC is losing altitude, having faced rejection at the descending trendline for three straight weeks.
The 14-week relative strength index (RSI) remains in bearish territory below resistance at 53.00. It’s worth noting that the 53.00–55.00 range acted as a strong support throughout the 2016–2017 bull run.
Hence, a move above 55.00, if and when it occurs, could be taken as a confirmation of bull market.
Monthly and daily charts
Bitcoin’s failure to hold above the descending, bearish 5-candle MA (above left), as represented by the October candle’s upper wick, is translating into a price drop, as expected.
The MACD histogram on the daily chart (right) has crossed below zero over the weekend and is currently signaling at its most bearish since Oct. 3 with a -59.00 reading. The RSI is currently bearish below 50.
BTC has also found acceptance below the 200-day MA – a level that acted as strong support in the nine days to Nov. 7.
All-in-all, BTC appears on track to test and possibly breach the 50-day MA at $8,552. A violation there would expose the psychological support of $8,000.
On the higher side, a convincing move above the 3.5-month descending trendline hurdle, currently at $9,335, is needed to confirm a bullish breakout.
Disclosure: The author holds no cryptocurrency assets at the time of writing.