Bitcoin Faces Drop Towards $3K After Brief Price Bounce


Bitcoin (BTC) still has the potential to drop towards $3,000, despite a minor bounce from 15-month lows seen on Friday.

On Friday, the leading cryptocurrency by market value picked up a bid at $3,210 –  a level last seen in September 2017. The ensuing corrective bounce, however, seems to have run out of steam, as bitcoin is currently trading at $3,470 on Bitstamp – down 4 percent from yesterday’s high of $3,633.

It is worth noting that prices are currently down more than 80 percent from the record high of $20,000 reached last December. Further, it has depreciated close to 47 percent in the last four weeks, owing to which the technical indicators are reporting record oversold conditions.

Even so, BTC  is struggling to post a notable price bounce, which indicates the bearish sentiment is still quite strong.

Therefore, the cryptocurrency is likely to remain on the defensive in the near future. Notably, the 3-day chart, which offers a better picture of the broader market trend than the daily and intraday charts, is indicating room for a drop below the psychological support of $3,000.

3-day chart

As seen above, the previous three-day candle closed below the support of $3,463 (low of multiple three-day candles in September 2017), validating both the recent high-volume sell-off from $6,200 and the bearish lower-high pattern carved out along the downward sloping 5-candle moving average (MA) over the last few days.

Further, the death cross (bearish crossover between the 50- and 200-candle MAs) and the descending 10-candle MA is indicating a bearish setup.

As a result, BTC looks set to test $2,972 (September 2017 low) in the near-term.

4-hour chart

Over on the 4-hour chart, BTC is struggling to cut through the descending trendline (yellow) hurdle, currently at $3,540. A break above that level could yield a stronger corrective rally to $3,800 (falling trendline hurdle).

The RSI, however, has already dived out of the ascending trendline. BTC, therefore, may have a tough time clearing the immediate resistance at $3,540.


  • BTC risks falling to $2,972 (September 2017 low) in the near-term, according to the 3-day chart.
  • Prices may rise to $3,800 if BTC clears the resistance at $3,540 in the next few hours. The bearish outlook, however, would be invalidated only if the descending 10-candle MA on the 3-day chart, currently at $4,250, is scaled.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

Bitcoin image via Shutterstock; charts by Trading View 

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