Bitcoin Price Analysis: How Far Is This Falling Channel Taking BTC/USD?

bitcoin

  • Bitcoin continues with the lower high and lower pattern with the descending channel.
  • The immediate downside is protected by the 50-day MA addition to $8,400 and $8,000 support zones.

Bitcoin took a breather from the downtrend over the weekend following Friday’s flash drop. Bitcoin failed to sustain gains above $9,200 and embarked on a journey of breaking down support areas. For instance, on breaking below $9,000, the short-term support at 8,050 and $8,800 caved in allowing losses to extend towards $8,600.

Following a shallow recovery over the weekend, the trading was dominated by consolidation movements. BTC/USD at some point stepped above $9,000 but gains were capped under $9,200. The prevailing trend is marred with declines whereby Bitcoin is re-targeting the same lows reached on Friday.

BTC/USD daily chart

BTC/USD price chart
BTC/USD price chart by Tradingview, Coinbase

For now, the price is teetering at $8,691 and is between the moving Average support and resistance. On the downside, Bitcoin is supported by the 50-day MA at $8,549.43. On the upside, the largest crypto’s movements are limited by the 100-day MA at $9,459.

The most conspicuous feature is the falling channel. Bitcoin has tested both side of the channel numerous times. However, the price continues to form a lower high and a lower low pattern. The extent that this channel will take Bitcoin is not certain.

From a technical perspective, Bitcoin is likely to pull the downtrend further. The RSI, for example is heading towards 40 and 30 after breaking below 50 (the average). If bulls manage for a recovery, gains to the upside will remain capped under $9,000. If the RSI hits oversold conditions (characterized by a further slump towards $8,000) then Bitcoin buyers can easily forge a reversal movement above $10,000.

Technical Levels

Spot rate: $8,700

Trend: Bearish

Volume: Expanding

Support: 8,400 and $8,000

Resistance: $8,800 and $9,000

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