- The MACD suggests the bears’ grip is still intact.
- If Bitcoin clears $10,500 support, chances of stopping at last week’s $10,300 support are slim.
It is clear that crypto volatility is something that investors will have to endure for a much longer time. While recovery is welcome, price swings cause panic among investors while making it hard for digital currencies to go mainstream. Besides, institutional investors prefer to stay away from a volatile market due to the risks it carries with it.
BTC/USD 1-h chart
The 1-hour chart for BTC/USD, the most popular trading pair in the cryptocurrency market, the prevailing mode is bearish. This is happening following the failure to break above $12,500 in the recovery from the key support at $10,300 (last week’s support area). For most of the sessions on Monday Bitcoin hovered above $11,000. However, the return of the bears has sent it to levels close to $10,500.
Looking at the price from a technical perspective, Bitcoin has an inclination towards a further breakdown. The Moving Average Convergence Divergence (MACD) inability to recover flowing the slide into the negative region, suggest that the bears’ grip is still intact. At the same time, the almost none existent divergence shows the presence of enough bullish pressure to defend $10,500 support area.
The Relative Strength Index (RSI) is also struggling to stay above the average. In fact, the recent slide has seen it approach the oversold territory. However, the indicator is pointing upwards at press time to show that the bulls are increasing their positions following the drop from levels above $11,000.
On the upside, $11,000 broken support will hinder recovery. The trendline resistance which currently coincides with the 100 Simple Moving Average (SMA) will make an uphill task for Bitcoin to trend towards $10,000. On the downside, if Bitcoin clears $10,500 support, chances of stopping at last week’s $10,300 support are slim. Therefore, a further breakdown could test $10,000 while $9,000 is presented as the major support considering the higher volatility levels.