Crypto News & ICO Reviews
Having failed to scale a major resistance level on Monday, bitcoin (BTC) fell below the $11,000 mark soon before press time.
CoinDesk’s Bitcoin Price Index (BPI) rose to an intraday high of $11,660 yesterday, yet closed the day (as per UTC) below the inverse head-and-shoulders neckline resistance of $11,600. The failure to hold above the critical resistance has not gone down well with the market as the cryptocurrency fell to a low of $10,890 today.
The rejection at the inverse head-and-shoulders neckline resistance and today’s break below $11,000 look to have weakened the bull case on the technical charts, and a major positive move looks increasingly unlikely in the short-term.
The above chart (prices as per Bitfinex) shows:
- Bitcoin created a bearish “inverted hammer” (also known as a shooting star) at the inverse head-and-shoulders neckline resistance yesterday. This is a bearish reversal pattern that occurs at the top of the uptrend. That said, only a negative follow-through today would indicate BTC has topped out.
- The cryptocurrency has dipped below the trendline sloping downwards from the Dec. 17 high and Jan. 6 high. A close (as per UTC) below the trendline would weaken the bull case.
- Also, BTC bulls has breached the support of the ascending trendline (drawn from Feb. 6 low and Feb. 26 low).
So, yesterday’s price action highlights exhaustion near the all-important resistance. Meanwhile, the 4-hour chart below signals scope for a drop to $10,900-$10,600.
Having faced rejection above $11,600, BTC fell below trendline support, while the relative strength index (RSI) has breached the horizontal trendline support.
As of writing, BTC is trading around the 4-hour 50 MA and could soon extend losses to $10,675.
Moving averages give mixed messages
The 5-day moving average (MA) and 10-day MA are sloping upwards in favor of the bulls. However, the 50-day MA is still pointing bearishly down.
BTC could drop below drop to $10,900-$10,600 as indicated by the bearish set up on the 4-hour chart. However, only a daily close (as per UTC) below the 10-day MA (seen now at $10,837) would signal bullish invalidation.
In the worst case scenario, a daily close (as per UTC) below the descending 50-day MA could yield a sell-off to $7,960 (Feb. 2 low).
On the higher side, a close above the inverse head-and-shoulders neckline would open up gains towards $17,000.
Slackline image via shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at email@example.com.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.