Bitcoin may go as low as $5,000 if it breaks the key support level at $6,900, having failed to capitalize on signs of weakening bearish momentum yesterday.
The cryptocurrency’s technical charts produced a doji candle, signaling short-term bearish exhaustion but a corrective rally remained elusive as bitcoin ran into offers above $7,400.
The may losses signal a continuation of the sell-off from the recent high of $9,990 and indicate scope for a drop to $6,900 – a level that the bulls need to defend at all cost. If they can’t, prices may go as low as $5,000.
The bearish outside-day usually indicates a bullish-to-bearish trend change. However, when viewed against the backdrop of Sunday’s doji candle, the bearish outside-day signals revival/continuation of the sell-off from the May 5 high of $9,990.
According to historical data, bitcoin climbs every time the RSI on the daily chart drops to or below 30.00. However, the historical pattern may not come into play this time, as BTC’s long-term technical studies have turned in favor of the bears.
As a result, it’s likely that BTC will drop to $6,900 (triangle support) soon – although it may not happen in the next 24 hours as the short-duration chart shows a temporary bullish setup.