After a drop yesterday, bitcoin (BTC) risks another move below $6,000 in the next 24 hours, but it will still likely fare better than other cryptocurrencies.
On Tuesday, bitcoin closed (as per UTC) below the immediate support of $6,108 (June 13 low), pouring cold water over the prospects of a corrective rally above a major technical hurdle at $6,425 (April 1 low).
The failure to capitalize on early signs of short-term bullish reversal has shifted risk in favor of a break below the $6,000 mark (February low).
Even if a drop in prices is seen, bitcoin could still outperform other cryptocurrencies, as a break below $6,000 could trigger risk aversion in the markets, forcing investors to venture out of high-risk alternative cryptocurrencies and into bitcoin.
At press time, BTC is trading at $6,100 on Bitfinex – down 2.25 percent on a 24-hour basis.
BTC was expected to scale April 1 low of 6,425 this week, courtesy of the bullish price-relative strength index (RSI) and bullish price-money flow index (MFI) divergence and the long-legged doji. Instead, it created another lower high (bearish pattern) on the chart as it fell from $6,341 (June 25 high) to $6,020 (today’s low).
Further, BTC closed (as per UTC) below the immediate support of $6,108 (June 13 low) yesterday, putting the focus back on the broader bearish outlook, as indicated by the falling channel and downward sloping Bollinger Bands (+2,-2 standard deviation on the 20-day moving average).
So, BTC could drop below $6,000 in the next 24 hours. On the downside, immediate support is lined up at $5,755 (Sunday’s doji candle low) and $5,717 (lower Bollinger Band).
Should prices take a positive turn, immediate resistance is located at $6,341 (June 25 high) and $6,560 (20-day MA).
Clearly, BTC chart is biased to the bears, however, other cryptocurrencies will likely post bigger losses, as indicated by a bearish breakdown in ether-bitcoin (ETH/BTC) exchange rate…