Bitcoin’s continuous defence of key support may bring a minor bounce, however, the bias will remain bearish as long as prices are kept below resistance near $9,100.
On Tuesday, a bullish-to-bearish trend change was noticed in the cryptocurrency market. The top cryptocurrency capitalization dropped by more than 10%.
On Tuesday, the cryptocurrency marked a low of $7,998 but closed at above the 200-day MA, then located at $8,288. On Wednesday, similar price action was seen when sellers failed to secure a close below the long-term support.
Bitcoin resistance could attract bargain hunters. The MA is widely regarded as a barometer of a long-term trend. If cryptocurrency’s charting higher lows above the 200-day MA, while lower lows below the MA represent bearish conditions, the cryptocurrency is set to be in a bull market.
The bearish outlook would be invalidated only if prices find approval above $9,097 (May 30 high); and, an improving bounce could be seen in the next 24 hours or so. Defending the 200-day MA for the third straight day shows a sign of temporary seller fatigue. Hence, there could be an oversold bounce to highs above $8,700.
However, the bounce could be short-lived, as the MACD histogram continues to produce deeper bars below the zero line. This means that the bearish momentum is still quite strong.
Tuesday’s drop confirms the transition from the bullish higher lows, higher highs setup to bearish lower highs, lower lows setup. Hence, the bias will remain bearish and the cryptocurrency will remain on the quest for a drop below $8,000 as long as prices are trading below $9,097.
Bitcoin’s weekly chart is stating a double-top bearish reversal pattern.
