- Bitcoin is sidelined with bearish bias even amid the rush to safety.
- The critical support of $9,000 is under threat as long as the price stays below $9,200.
Bitcoin (BTC) resumed the decline during European hours and tested $9,133. While the critical support of $9,000 remains unbroken, the first digital coin is moving within a strong bearish trend amid shrinking volatility. At the time of writing, BTC/USD is changing hands at $9,155; however, if the bearish momentum is retained, the price may retest the above-mentioned support area by the US opening. Bitcoin's market capitalization is registered at $168.6 billion, while its market share is registered at 62.0%.
Bitcoin falls behind gold
Loose monetary policy, low yields and economic uncertainty benefit gold prices as investors tend to flee from risky assets and park their capitals in safe-haven markets. Bitcoin has been frequently touted as a hedge against inflation and a tool invented to shield investors from irresponsible monetary policies; however, unlike gold, it shows little reaction to the global macro developments.
According to Citi analysts, gold prices may climb to an all-time high in the next six-to-nine months, and break above $2,000 an ounce in the next three-to-five months if the geopolitical and economic situation shows no signs of improvement. Bitcoin is forecasted by retest $8,500 before it starts recovering and gets a chance to retest $10,000. As we have reported in our recent weekly forecast, the first digital currency is totally uncorrelated to fundamental developments, which makes it hard to forecast the near-term price movements.
BTC/USD: Technical picture
Bitcoin has been drifting towards the lower boundary of the current consolidation range since the previous week. The channel support is created by psychological $9,000, reinforced by 100-day SMA and the lower line of the daily Bollinger Band located on the approach to this barrier. Once it is broken, the sell-off is likely to gain traction with the next focus on a vital support $8,550 created by a combination of 200-day SMA200 and weekly SMA50. This area has been limiting the decline since the beginning of May, and most likely the bears will have a hard time pushing through.
BTC/USD daily chart
On the upside, the price attempted a move below 100-hour SMA but swiftly moved above this area. The next local resistance is created by 200-hour SMA located on the approach to $9,200. This MA has been limiting recovery since the beginning of the day. A sustainable move above this area is needed for the upside to gain traction with the next focus on Sunday's high of $9,250 and $9,500.
BTC/USD 1-hour chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.