Bitcoin price update: BTC/USD shows pullback signs on breaking flag pattern

BTC/USD trading pair is still navigating the sea of red in spite of the correction witnessed over the last weekend. Bitcoin had found support $8,000 before the recovery catapulted it slightly above $8,800. Lack of bullish momentum could not support the movement towards $9,000 instead, the price changed direction correcting below the formed bullish flag pattern.

Reaction to the flag pattern support break has extended the declines to the support at $8,400. Although a reversal on Monday has seen BTC/USD step above $8,500, the upside is limited at by the 100 Simple Moving Average (SMA) currently at $8,548.96.

Looking at the hourly chart, Bitcoin path of least resistance is to the downside. The RSI is heading back towards the oversold after recovering to 44.82 on Monday. The downward direction means that the bulls are gaining traction while the MACD is divergence continues to increase in the negative region to show that the sellers influence is still growing.

However, all is not lost for the bulls as the shorter term 50 SMA is holding ground above the 100 SMA. The support at $8,400 is key to Bitcoin and will prevent declines towards $8,000. Other key support levels are $8,000, $7,500 and $7,000.

BTC/USD 1-hour chart