Bitcoin price drops below the ascending channel after gains became unsustainable above $11,000.
BTC/USD is staring into a possible freefall to $10,400 if the bearish biased technical picture remains unchecked.
Bitcoin price is holding marginally under $11,000 following a rejection from the new year high around $11,434 (on Coinbase). The recovery from last week was sharp and fulfilling as observed on the 4-hour chart. Already, sustaining gains above $11,000 has become difficult. For this reason, BTC is teetering at $10,888 amid an existing strongly bearish trend. The volatility across the market is expanding, in other words, sellers could gain traction in the coming sessions.
At the time of writing, Bitcoin has already corrected under the sharp ascending channel support. Technically, Bitcoin is hanging at the edge of a cliff. The Relative Strength Index (RSI) is currently struggling to hold above 70 (overbought line). Retreat below this zone is likely to encourage more sellers to join the market.
The same bearish trend is emphasized by the MACD after it stalled at 387. The bullish divergence has narrowed and almost giving way for a bearish one. If this technical picture remains unchecked, BTC/USD plummeting to $10,400 would be unstoppable.
BTC/USD 4-hour chart
On the bright side, it is not all lost for the bulls as they can easily redeem themselves owing to the fact that the 50 SMA is still expanding the gap above the 100 SMA in the 4-hour range. This shows that buying pressure is still present in smaller margins across the market; even enough to hold the price above the initial support at $10,800.
If push comes to shove and Bitcoin spirals, the target on the downside is $10,400 but first support at the 61.8% Fibonacci retracement level must be broken. Other lower buyer congestion areas encompass the 50% Fibo at $10,200, $9,950, the 50 SMA, 100 SMA and $9,600.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at firstname.lastname@example.org