Bitcoin has had a very quiet start to this week after the bulls failed to protect their support level of $235 during the last Sunday. The cryptocurrency recently took support from the mentioned technical level and rebounded to $240 before the selling pressure humbled the buyers.
Bitcoin is now trading at $230.49 and is being pressured to stay below the breached support which will now act as a resistance.
The bears have reasserted their dominance. The upward biased price structure has been damaged and the technical indicators have turned bearish once again. But $220-225 being an extremely strong weekly support, will it be breached?
Bitcoin Chart Structure – After violating the level of $235, Bitcoin skid to test the level of the previous base i.e. around $220-223. This weekend action has diminished hopes of a quick revival.
Fibonacci Retracements – I had mentioned a possibility in one of my earlier recent analyses that if the bulls fail to head above the 38.2% Fibonacci retracement of $244, then expect the price to fall to the 23.6% Fibonacci retracement level of $226.32. As can be seen, Bitcoin succumbed to test this floor and has rebounded.
Moving Average Convergence Divergence – The Histogram has finally come under pressure and toppled into negative values. The MACD and the Signal Line fell just short of entering the positive domain. The latest MACD, Signal Line and Histogram values are -3.1516, -2.9788 and -0.1728 respectively.
Money Flow Index – The MFI still reads a strong value of 55.6427.
Momentum – The Momentum indicator is fast accumulating losses and now reads -9.7900.
Relative Strength Index – The latest RSI value is 42.3943.
The sellers have completed overpowered the buyers, and the level of $220-225 is the last hope for Bitcoin. If the cryptocurrency settles below this zone on a weekly basis, then a severe decline will be seen in the market cap of Bitcoin.