Bitcoin price faces a growing bearish grip after failing to settle above the immediate resistance at $34,000.
The bellwether cryptocurrency is on the verge of a breakdown to $30,000, mostly if the immediate support at $32,000 caves.
Bitcoin has managed to recover from the recent 20% dump from the new all-time high at $34,807 to $27,681. The flagship cryptocurrency continues to outperform other digital assets. At the time of writing, BTC is teetering at $33,950.
On the upside, Bitcoin is facing resistance at a weekly high established at $34,511. The Relative Strength Index (RSI) clearly shows that BTC/USD is not oversold, but the bearish is grip is intensifying all the same.
If the bellwether cryptocurrency fails to break above the immediate hurdle at $34,000, declines towards $30,000 will likely come into the picture. Moreover, its bearish leg could be emphasized if the RSI’s divergence remains bearish.
The bearish divergence occurs when the RSI forms a series of lower highs while the asset’s price creates higher lows. In technical analysis, the pattern is interpreted to be strongly bearish because it shows a decrease in trading volume while signaling an impending reversal.
Similarly, the 4-hour chart suggests that bears will gain more control over the price if Bitcoin closes the day under $34,000. On the downside, initial support is envisaged at $32,000. If declines stretch further down, the flagship cryptocurrency may seek anchorage at the 50 Simple Moving Average (SMA), currently at $30,278.
BTC/USD 4-hour chart
It is worth mentioning that the bearish outlook will be invalidated if BTC/USD resumes the uptrend and closes the day above $34,000. Moreover, buyers will be encouraged to join the market and push Bitcoin above the weekly high at $34,511. Addition price action above this level could elevate Bitcoin to new all-time highs above $40,000.
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