Omkar Godpole posted an analysis on CoinDesk yesterday last updated on 12:43 on Friday. Godpole notes that Bitcoin’s (BTC) reversal of its recent uptrend in prices was gathering momentum and a drop into bearish territory below the $6,200 level was now a possibility as shown by technical charts.
Bitcoin found acceptance below the lower edge of the rising channel on Thursday. This invalidated the positive price action that happened earlier in the week. The rally from the low of $6,201 on October 31 has finished at the high on November 7 of $6,540.
As the article went to press on Friday BTC was trading at $6,350 after reaching a five-day low of $6, 335 just before press time after a sudden $100 dollar drop.
The negative follow through after yesterday’s bullish channel breakdown may show the bears are emboldened after the price went down 2.9 percent from weekly highs. This could lead to a breach of the October 11 trendline support low during the next few hours, and the way could be clear to drop below the recent higher low of $6,200 that was reached on October 31.
BTC has established a lower highs and lower lows pattern, a bearish pattern as seen on the hourly chart. This validates Thursday’s bullish channel breakdown. Furthermore, BTC prices appear to have found acceptance under the key 200-hour exponential moving average (EMA) support. The major EMAS, 50, 100 and 200 are beginning to roll over toward a bearish trend. The 50-hour EMA appears ready to cross the 100-hour EMA from above and this will strengthen the bearish setup. The drop below the immediate support of $6,330 is likely to occur after a short period of consolidation as the relative strength index (RSI) shows oversold conditions below 30.00.
The daily chart shows that the earlier symmetrical triangle breakout and also a close above the critical 50-day EMA resistance that happened earlier in the week did not produce significant price gains. Such a failed breakthrough can often end up putting the bulls back in control. A drop back to $6,200 could be near.
Based on his analysis Godpole’s view is: “A combination of the failed breakout on the daily chart and the bearish setup on the hourly chart indicates that cryptocurrency could soon drop below $6,274 (trendline connecting the Oct. 11 low and Oct. 31 low + 76.4 percent Fibonacci retracement support) and drop below $6,200 (Oct. 31 low). A UTC close below $6,200 would invalidate the higher lows pattern seen on the daily chart, shifting risk in favor of a drop to the psychological support of $6,000. A bullish revival is seen only above the weekly high of $6,540.”
There was no drop in the price of BTC at all today. Right from the open the price rose to a high near $6,400 at $6,394 as mentioned earlier. This is now November 11 UTC. The price opened at $6,368 a bit above it opening on Saturday. It has risen slightly to $3,380. At just a little over an hour into the new day the price at 01:15 is $6,376. The bearish scenario is nowhere to be seen yet. However, there is no bullish trend either just a marginal rise upward and no doubt a consolidation before the next move. Recent technical analyses of BTC price movements often turn out to be contradicted by the actual movements. Of course it is early in the day and perhaps the bearish action will return but it appears about as likely that a move upwards could happen. The present price of BTC can be found here.