The price of Bitcoin fell sharply going into the daily close, marking another bearish start to the week. With prices plummeting firmly back towards previous lows, investors and traders alike are once again wondering how much bullish resolve there is in the cryptocurrency market.
Bitcoin price 00 went into Tuesday encouragingly bullish, with Asian and European markets bidding prices up 3% to highs of $ 7,150. The low volume rally was later rejected. A sharp selloff ensued pushing prices back down to below $ 6,700, representing a blow to the bulls who hoped that $ 6.800, the 61.8% Fibonacci retracement of the July bull, would act as a key level of support.
Bitcoin is now firmly into the critical price range, which has previously proven to be strong support, with $ 6650-$ 6800 being a key area where buyers must enter the market to avoid Bitcoin making new lows.
1 Hour Chart
Looking at the hourly chart, there are early signs of a bullish reversal, with a divergence between price and both the RSI and CMF indicating that selling momentum has been weakening as the price reached its lows. Despite the divergences on the lower time frames, a longer period of consolidation is likely to be needed before a convincing low is found.
The next few hours will prove to be crucial with $ 6600 being an area the bulls need to defend.
Taking an Early look at the weekly chart, trading volumes continue to trend lower in the market. This illustrates that retail investors are still yet to return to the market and are likely not to do so until the price begins to move favorably once again. The RSI and MAC-D are still trending up which again suggests that downward pressure on price is slowing, but this pressure may soon return if new lows are found.
[Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by BITFINEX. The charts for analysis are provided by TradingView.]
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Images courtesy of Shutterstock, TradingView.com
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