Bitcoin‘s price risks deeper losses below $8,000 as the bears seem to be winning a four-day-long tug-of-war with the bulls.
At press time, BTC is changing hands at $7,950 on Bitfinex – down 2 percent in the last 24 hours – having clocked a low of $7,930 earlier today.
The cryptocurrency has been largely restricted to a narrow range of $8,300–$8,050 since late Friday. Consequently, the Bollinger bandwidth – a volatility indicator – dropped today to the lowest level since October, as per the short duration technical chart.
Hence, we could be in for a big move, as a prolonged period of low volatility (range-bound activity) usually makes way for a big move on either side.
Further, the big move (if it does materialize) could happen to the downside as the bull case has weakened following BTC’s failure to capitalize on a descending broadening channel breakout witnessed on Friday.
The above chart shows:
- The bulls failed to capitalize on the descending broadening channel breakout, leaving the doors open for the bears to make a strong comeback.
- A Bollinger bands breakdown (standard deviation of +2, -2 on the 20-candle moving average) – a bearish setup.
- A downside break of the trading range – bearish pattern.
- BTC has found acceptance under the support of the 50-candle moving average (MA).
- The relative strength index (RSI) has adopted a bearish bias (dropped below 50.00).
Clearly, the technical chart is aligned in favor of the bears. Further, the decline could be sharp, a key volatility gauge indicates…