Bitcoin Price Faces Minor Drop After Failure to Pass Key Resistance
Bitcoin’s price looks vulnerable to modest slippage in the next 24 hours, as its persistent failure to pass a key moving average hurdle could embolden the bears.
The leading cryptocurrency has been in a narrow sideways drift in recent days, with the 50-day exponential moving average (EMA) proving a tough nut to crack since Saturday.
BTC’s inability to cross the 50-day hurdle indicates that the bullish move from the Sept. 19 low of $6,100 has lost momentum. As a result, the door is now open for the bears to make their presence felt over the next 24 hours, and prices could be forced down to $6,300.
As of writing, BTC is changing hands at $6,580 on Bitfinex, having faced rejection at the 50-day EMA level of $6,649 earlier today.
As seen on the daily chart, the 50-day EMA has been capping the upside in BTC since late September. It is worth noting that BTC is trading below all three major moving averages – 50-day, 100-day, and 200-day EMA – which could be considered a bearish sign.
However, these averages are flatlined, which indicates that BTC has lacked a clear directional bias for far too long. As a result, a big move in either direction is overdue.
Over on the 4-hour chart, BTC is trading just below the lower edge of the ascending triangle, meaning the bull failure at the 50-day EMA is beginning to prove costly.
Furthermore, the relative strength index (RSI) has fallen back below 50.00 in bearish territory.
A downside break would be confirmed if the current or the next 4-hour candle closes below the triangle support. In that case, BTC could fall quickly to $6,328 (Sept. 28 low).
- BTC’s persistent failure to move past the 50-day EMA could end up yielding an ascending triangle breakdown on the 4-hour chart.
- An ascending triangle breakdown, if confirmed, would open up downside towards the immediate support of $6,328 (Sept. 28 low). A violation there would expose the next support, lined up at $6,100.
- On the higher side, acceptance above the 50-day EMA of $6,649 would put the bulls back in a commanding position.
Disclosure: The author holds no cryptocurrency assets at the time of writing.