Bitcoin is still looking south, having hit four-month lows today, but the bearish momentum may wane due to short-term oversold conditions, the technical charts indicate.
More bears joined the party in the U.S. session Tuesday after the cryptocurrency failed to cross twin resistance at $6,859 (50-hour moving average (MA) and 23.6 percent Fibonacci retracement).
As a result, the price fell to $6,370 on Bitfinex today, the lowest level since Feb. 6. At press time, bitcoin was slightly higher at $6,453.
The drop to the four-month low has bolstered the already bearish technical setup and raised the odds of a sell-off to $6,000 (February low).
However, the bears may take a breather over the next day or two, as the relative strength index (RSI) is hovering at the key bullish reversal zone, and bitcoin could hold around support at $6,400 or possibly see a minor corrective rally.
Currently, the RSI is holding below 30.00. Historical data shows BTC stages a “V”-shaped recovery every time the RSI drops to or below 30.00. However, things may pan out differently this time, as long-term technical charts are biased to the bears…