30 Jan $10K Exposed? Bitcoin Bulls Fail to Defend Price Floor
Bitcoin is looking down after the bulls failed to defend a key level in the early Asian hours, price chart analysis suggests.
Prices on CoinDesk’s Bitcoin Price Index (BPI) fell below $11,000 at 01:44 UTC today and hit an intraday low of $10,805 at 03:29 UTC. The recovery seen in the next few hours ran into offers at $11,063.80, pushing bitcoin (BTC) back to near the intraday lows. The BPI was last seen at $10,840 levels.
The world’s largest cryptocurrency by market capitalization has depreciated by 3.47 percent in the last 24 hours, according to data source OnChinaFX.
On Coinbase’s GDAX exchange, BTC was last seen changing hands at $10,822. So, week-on-week, the cryptocurrency is largely unchanged – indicating a failure on the part of the bulls to capitalize on the sharp recovery from the Jan. 17 low of $9,005.
Comments on social media indicate the investor community is cautiously bearish on bitcoin. The price chart analysis too indicates that prices could suffer a quick drop to sub-$10,000 levels in the next few hours.
The above chart (prices as per Coinbase) shows:
- BTC has breached the rising trendline.
- The relative strength index (RSI) has rolled over from the bullish territory (above 50.00) and is trending lower in favor of the bears.
- The directional movement index (DMI) is biased lower and indicates the bearish move could gather pace in the next few hours.
The DMI comprises of the average directional index (ADX) (indicating the strength of the trend), plus the direction indicator (DI+) and minus direction indicator (DI-).
A rising or falling ADX shows a trend is strong. The outlook is bullish when the DI+ is above the DI-, and vice versa.
On the chart above, the DI- (red) moved above the DI+ (green) yesterday after prices fell from $11,570 to $11,279. So the bias is bearish.
Meanwhile, the ADX (black) has bottomed out and is showing signs of life (bearish move is strengthening), adding credence to the breach of the key rising trendline on the price chart.
- BTC could test $10,350 (former descending trendline support).
- A 4-hour close below $10,350 could yield a sell-off to $9,000 levels.
- Bearish invalidation would be seen only on a break above $11,690.
Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Coinbase.
Torch image via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at [email protected].
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.