Bitcoin (BTC) has been consolidating since September 26, when it formed the bottom of its current range after dropping out of a much larger consolidation around $10,000. A downtrend has been started after Bitcoin broke down, although it seemed possible for a time that BTC could shoot back up and cancel that forming downtrend. But now, Bitcoin is looking still weaker, and we will consider the scenario of another break down.
We start on the 12-hour chart, and see that a push off the bottom of this local structure failed to make much progress. This push has lost the 9 exponential moving average (EMA) after briefly retaking it. Not enough volume has come in to push Bitcoin much past $8,400.
The histogram is also clearly looking ready to roll back over into the negative side of the range.
Moving to the 4-hour, we see that Bitcoin is already breaking an important diagonal trendline in this tiny local structure. This happened on September 30, and buyers stepped in to push BTC back up to healthy levels. But it seems they will be asked to do so again, in order to stave off another drop.
The MACD has crossed bearish on this chart, although the trading period is not yet closed. The same story on the histogram: this is also crossing negative with an accelerating arc down.
Finally, on the daily chart, we see a weak retracement from top to bottom. The counter-rally hasn’t got past the 0.236 level, which constitutes a weak retracement. This suggests further downside, given that the basic structure looks like a bear flag.
If we do get another leg down, the next big support is around $7,000, with the next at $6,400.
But this structure hasn’t broken yet, at time of writing. There is still a chance for an out-of-nowhere flood of buy support to push Bitcoin up. But the leading crypto looks weak here. Another drop would be no surprise.
The views and opinions expressed here do not reflect those of CryptoGlobe.com and do not constitute financial advice. Always do your own research.
Featured Image Credit: Photo via Pixabay.com
