Bitcoin bears smell blood, and set their eyes at $6,000

Bitcoin broke free from the narrow range finally, though crypto enthusiasts might be disappointed with the direction of the breakthrough. The digital coin No. 1 dipped as low as $6,208 on Monday before recovering to $6,262 by press time. 

The fact that the coin failed to regain ground above $6,300 looks pretty ominous. If the selling pressure resumes later during the day we will retest the recent low at $6,060 sooner rather than later. 

Last, Bitcoin briefly dipped under $6,000 in mid-August., thus a sustainable move lower may trigger panic selling. From the technical point of view, psychological $6,000 now coincides with the long-term sloping trendline from July 25 high. 

It was broken on October 15 and BTC/USD has been consolidating above this level ever since. There is nothing much in terms of support levels below the said key handle, which means that the cryptocurrency may enter a free fall with the initial aim at $5,800 and $5,770, which June 24 low. 

The Relative Strength Index (RSI) is turning higher, which may signal that a short-term correction is in store, though a trip to the North is going to be hard. It is riddled with technical resistance levels, starting from psychological $6,300 and a confluence of SMAs, and 23.6% Fibo retracement (weekly) on approach to $6,400.

Bitcoin is down 53% since the beginning of the year, while the whole cryptocurrency market has erased over $600B of its market value since its peak reached in January. 

From the fundamental point of view, a new hack attack at a Canadian cryptocurrency exchange coupled with the news that the UK regulator is about to ban crypto-derivatives trading might have served as a bearish trigger that initiated a move outside the range.

BTC/USD, daily chart