- Bitcoin’s repeated failure to produce a strong bounce from key support indicates the bullish sentiment has fizzled somewhat.
- Failure to hold above a bearish MA on the longer-term chart indicates scope for a deeper drop.
- BTC risks falling to $8,800 in the short-term and may extend the decline to $8,500.
- A high-volume triangle breakout on a 4-hour chart would be bullish, although that looks unlikely at press time.
Bitcoin is struggling to revive its stalled rally and could soon roll over to deeper support levels below $9,000.
The top cryptocurrency picked up a bid near $7,500 on Oct. 25 and jumped to $10,350 on the following day, according to Bitstamp data. The breakout into five figures, however, was short-lived, as prices quickly fell back below $10,000 on Oct. 28 and have remained largely trapped in a narrow range of $9,600–$9,000 since.
Downside has been restricted so far by the 200-day average – a barometer of long-term market trends. A pullback typically reverses from key support levels like the 200-day MA, especially if volumes are low, as has been the case recently.
So far, however, the cryptocurrency has failed to produce a strong bounce from the support, despite positive seasonality.
Prices jumped more than $400 to $9,586 from the MA on Nov. 4 only to surrender gains on the following day. A similar weak bounce has been observed in the last 24 hours or so with prices rising to $9,450 only to dive back to lows near $9,200.
These shallow bounces indicate bullish sentiment generated by the sharp rise to $10,350 has weakened and the market may test dip demand by revisiting levels below $9,000.