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Bitcoin Hits One-Month Low As $10K Sell-Off Resumes

Omkar Godbole
Updated

Bitcoin's (BTC) drop to one-month lows below $8,000 has strengthened the bear grip on the markets, the technical charts indicate.

The cryptocurrency fell to $7,925 on Bitfinex earlier today - the lowest level since April 18 and has retraced 50 percent of the rally from the April 1 low of $6,425 to May 5 high of $9,990.

As of writing, BTC is changing hands at $8,120, representing a 2 percent drop in the last 24 hours. The recovery from the low of $7,925 could be associated with the oversold conditions shown by the relative strength index (RSI) in the hourly chart.

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However, the gains will likely be short-lived as the odds are stacked against the bulls, according to technical charts.

Daily chart

BTC closed well below the 50-day moving average (MA) yesterday, signaling a continuation of the sell-off from the recent high of $9,990. Further, BTC has also found acceptance below $8,207 (50 percent Fibonacci retracement), a level which acted as a strong support since May 12.

The 5-day moving average (MA) and the 10-day MA continues to slope downwards in favor of the bears. The relative strength index (RSI) is also biased bearish (below 50.00 and falling).

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And last but not the least, BTC's turn lower from $8,884 (May 14Â high) and drop below $8,100 yesterday have established a lower highs and lows pattern (bearish setup).

So, it is quite clear that the drop to one-month lows in the last 24 hours has the put bears in the driver's seat.

View

BTC looks set to test the immediate support lined up at $7,787 (61.8 percent Fibonacci retracement). A daily close (as per UTC) below that level would be the final confirmation of bearish trend reversal and will likely be followed by a sell-off $7,000.

Only a daily close (as per UTC) above the 10-day MA (currently seen at $8,555) would abort the bearish view and could yield sideways to positive action.

Bitcoin image via Shutterstock

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