4 Reasons Why Bitcoin's Price Could Now Drop to $6K

0
44

Bitcoin’s drop to three-week lows today has likely kick-started a bearish move towards the major support at $6,000, technical charts indicate.

The leading cryptocurrency fell to $6,252 at 7:15 UTC on Bitfinex – the lowest level since Sept. 19 – and was last seen trading at $6,300, representing a 5-percent drop on a 24-hour basis.

The failure to capitalize on Monday’s move above the crucial 10-week exponential moving average (EMA) resistance of $6,998, despite the upside break of a key falling trendline, ended up emboldening the bears, as expected.

More importantly, the sell-off witnessed in the last few hours has put an end to a prolonged period of lateral trading. The technical indicators have rolled over in favor of the bears, adding credence to the bearish setup on the long duration charts.

Further, the big drop in the equity markets this morning may not bode well for BTC, as the cryptocurrency is still being treated as a risk asset.

As a result, the cryptocurrency is eyeing a drop toward $6,000. Here are four reasons why that is looking likely:

Bollinger band breakdown

The Bollinger bands (standard deviation of +2, -2 on the 20-day moving average) on the daily chart have been moving in a sideways manner since Sept. 22, signaling a lack of clear directional bias.

As a result, bitcoin price volatility, as represented by Bollinger bandwidth and the gap between weekly high and low, fell to 21-month lows and 15-month lows, respectively, last week.

A prolonged period of low volatility usually makes way for a big move in either direction. In BTC’s case, that move looks to have already started to the downside, with a breach of the lower band, and may move further towards $6,000.

Indicators are biased toward the bears

The relative strength index (RSI) has breached the rising trendline and fell into the bearish territory

WANT TO KNOW MORE? READ FULL ARTICLE ON CoinDesk

Disclaimer: No copyright infringement intended. The content presented in this article is only as a preview and completely belongs to CoinDesk. Our site only helps interested users to get to the right content quickly. You can always see the full article here: https://www.coindesk.com/4-reasons-why-bitcoins-price-could-now-drop-to-6k/

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.