- Bitcoin dipped to $9,111 over the weekend, forming a bearish candle, despite a quick bounce back above $9,600.
- For the sixth day in a row, prices continue to trend below the 50-period moving average – an indication the bears firmly control the short-term trend.
- The daily and weekly RSI and the “awesome” oscillator are beginning to flash bearish warning signs.
- Bitcoin would see a reversal of the short-term bearish outlook only if prices close above $9,880 (July 25-27 resistance) on Bitstamp.
Bitcoin (BTC) dropped to a low of $9,111 at around midnight, then quickly rebounded as the bulls pounced on the opportunity for lower prices and bought the cryptocurrency back up to a high of $9,725 (on Bitstamp) so far on Monday.
However, the general momentum is still favoring the bears, with chart indicators calling a move toward $9,100 and possibly as low as $8,800.
Further, the 50-period moving average (MA) on the daily chart suggests that the bears are beginning to stretch the case for seizing control of the mid-term trend too.
At press time, BTC is changing hands at $9,475, according to CoinDesk’s bitcoin price index.
BTC can be considered bearish in the immediate short-term as long as prices are trending below the 50-period MA.
The cryptocurrency is now into its sixth day of consolidation below that key line and, the longer prices continue to trend at these levels, the greater the risk for the bulls.
Further, the daily RSI is demonstrating a bearish bias with strong resistance seen at the neutral 50 line (arrows on chart) hinting at a greater pressure from sellers.
Last but not least, the awesome oscillator (AO) is flashing a bearish twin peak pattern, signaling further downside potential with a likely landing pad located along the confluence of support at $8,800 (calculated from the 100-period MA and July 25–27 resistance zone.)
The weekly chart will do little to lift bullish spirits, with suggestions of a greater pullback than those seen on June 27 and July 10-16.
The prior weekly candle close, for example, produced a bearish engulfing candle, meaning the likelihood for further price discovery at lower levels has increased significantly.
The AO is also demonstrating signs of deflating bullish bias as the bars sink toward neutral amid greater selling pressure.
The onus is now firmly on the bulls to regain control of the short-term trend in order to avoid handing over the reigns of the mid-term trend as well.
For that, they will need to push prices to a close above $9,880 (taken from July 25–27 resistance, as per Bitstamp prices).
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin image via Shutterstock; charts by Trading View
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