Bitcoin Eyes $9K Price Support After Drop to One-Month Lows
Having dived out of a narrowing price range, bitcoin is looking weak and may end up falling to $9,000 in the next 24 hours.
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- Bitcoin risks falling to $9,000 in the next 24 hours, having dived out of a narrowing price range on Wednesday. A violation there would expose the next support lined up at $8,500.
- The breakdown looks legitimate as it is backed by a surge in selling volumes. The daily chart indicators are also reporting bearish conditions.
- A weekly close (Sunday, UTC) below $9,533 would confirm a double top breakdown on the weekly chart.
- The bearish case would be invalidated above Wednesday's high of $10,280, although that looks unlikely.
Bitcoin (BTC) could drop to $9,000 in the next 24 hours, having strengthened the short-term bearish case with a drop to one-month lows earlier today.
The top cryptocurrency by market value fell to $9,320 at 07:36 UTC today, the lowest level since July 28, according to Bitstamp data.
Prices fell 4.48% on Wednesday, confirming a downside break of a recent narrowing price range represented by trendlines connecting Aug. 20 and Aug. 26 highs and Aug. 15 and Aug. 22 lows.
Essentially, sellers came out victorious in a tug of war with the bulls, signaling a resumption of the sell-off from the Aug. 6 high of $12,325.
That bearish view has been bolstered by BTC's drop to four-week lows below the July 15 low of $9,467. As a result, a deeper slide to levels below $9,000 could be in the offing.
As of writing, BTC is changing hands at $9,415 on Bitstamp, representing a 7 percent drop on a 24-hour basis.
Daily chart
![download-4-28](https://www.coindesk.com/resizer/m5-1KmSdgFyPkOf1-nS-Swb4rmU=/560x240/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/IQWT7JCWKBG3ZCIIALIKW6JAUE.png)
The range breakdown and the drop to one-month lows have exposed July's low of $9,049.
Supporting the bearish case are the downward sloping 5- and 10-day moving averages. The 14-day relative strength index (RSI) has also breached key support (horizontal line) and is reporting bearish conditions with a below-50 print.
What's more, the cryptocurrency has also found acceptance below the 100-day moving average (MA) – a level which acted as strong support in the seven days to Aug. 27.
Further, the 50-day moving average is beginning to trend south in favor of the bears.
4-hour chart
![download-3-31](https://www.coindesk.com/resizer/ho6pI1l_stlJcL-GLq32UvDPE3Y=/560x240/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/BT5VKDSXQVA77DQWGX6A276T34.png)
Trading volumes picked up as BTC dived out of the narrowing price in the U.S. trading hours yesterday. In fact, the selling volume witnessed in the four hours to 20:00 UTC on Wednesday was the highest since Aug. 7.
All-in-all, the stage looks set for a deeper drop in BTC. Acceptance below the July low of $9,049 would open the doors to $8,500.
The bearish case would be invalidated if the cryptocurrency finds acceptance above Wednesday's high of $10,280, although, as of writing, that looks unlikely.
Weekly close is pivotal
![download-2-34](https://www.coindesk.com/resizer/XZQb-1-KGQcrPC2_ClPBqEjETGI=/560x240/filters:quality(80):format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/ZQ4VAAPF35AAHFFEHGC74N5MQY.png)
Bitcoin's weekly line chart shows the cryptocurrency has charted a double top bearish reversal pattern with neckline support at $9,533. As of writing, prices are trading below the neckline support.
The breakdown, however, would be confirmed, only if prices print a UTC close below $9,533 on Sunday. That would create room for a sell-off to lows below $7,550 (target as per the measured move method).
The double top breakdown, if confirmed, would imply an end of the rally from lows near $4,050 seen on April 1.
It is worth noting that that the moving average convergence divergence histogram has already confirmed a bearish reversal with a drop below zero – the first since February.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Spiral staircase image via Shutterstock; charts by Trading View