Bitcoin market overview: Failed breakout sends BTC/USD on a brief waterfall drop
|- Failure for Bitcoin to break above $4,000 and sustain growth towards $4,200 is contributing to the current downtrend.
- RSI and the MACD on the 1-hour chart show that the bulls are gaining traction.
Bitcoin corrected below an established supported at $3,920 on Monday. The move was nothing but a confirmation of a bearish trend reversal had been forming in the last few days. The slide resulted in a drop below the 50 SMA 1-hour currently at $3,938.09. Bitcoin struggled to defend the next support target at $3,900, however, the tightening sellers’ grip sent Bitcoin to a 10-day low at $3,857.51 yesterday. The bear move had Bitcoin ejected from a recent trading range between $3,920 and $4,057.
It is clear that failure for Bitcoin to break above $4,000 and sustain growth towards $4,200 is contributing to the current downtrend. In fact, the move below $3,900 confirms the historic bearish momentum below the 21 SMA. This means that BTC/USD is still at risk of falling to the demand zone observed at $3,800.
A break below $3,850 is likely to reignite declines below the demand zone. However, at press time, Bitcoin is trading at $3,903.75 after reclaiming $3,900 support. The current bullish trend must clear the resistance at the 50 SMA in order to place Bitcoin on a clear trajectory above the longer term 100 SMA 1-hour currently at $3,958.81. The support turned resistance at $3,975 is expected to hinder growth but a break above the same level could see Bitcoin easily trend past the psychological $4,000 level.
Other indicators like the RSI and the MACD on the 1-hour chart show that the bulls are gaining traction. Besides, the bullish candle on the chart has engulfed the previous bearish candle. The RSI is heading upwards after testing the level around 22.86. Although the MACD is still below the mean line, it has recovered from -19.01 to the current -10.86.
For now, Bitcoins path of least resistance is to the upside but in the event, the trend reverses $3,900, $3,850 and $3,800 (demand zone) will work as significant support areas.
In other Bitcoin news, a report by UToday, a crypto news website details that soon a crypto wallet will launch on WhatsApp, Telegram, and Viber. The wallet will support Bitcoin (BTC) in the initial stages. However, after a successful trial period, other cryptocurrencies will be added to the platform. The wallet is being built by Wuabit and will have the integration of the above leading social media platforms. Some of the advantages the wallet is going to bring to users are simplicity and instant transactions.
BTC/USD 1-hour chart
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