Bitcoin (BTC) risks falling to the key support level of $6,900, having failed to capitalize on signs of weakening bearish momentum yesterday.
The cryptocurrency’s technical charts saw a doji candle on Sunday, signaling short-term bearish exhaustion. However, a corrective rally remained elusive as bitcoin ran into offers above $7,400 and closed (as per UTC) at $7,143 – the lowest daily close since April 12, according to Bitfinex.
Prices continued to drop today, with bitcoin hitting a 7-week low of $7,040 this morning. At time of writing, the price was at $7,130.
The losses signal a continuation of the sell-off from the recent high of $9,990 and indicate scope for a drop to $6,900 – a level that the bulls need to defend at all cost. If they can’t, prices may go as low as $5,000.
BTC created a bearish outside-day candle on Monday. These occur when a high is above the previous day’s high and the low is below the previous day’s low. In simple terms, it means trading on Monday started with optimism and ended with pessimism.
The bearish outside-day usually indicates a bullish-to-bearish trend change. However, when viewed against the backdrop of Sunday’s doji candle, the bearish outside-day signals revival/continuation of the sell-off from the May 5 high of $9,990…