Bitcoin’s (BTC) struggle for direction continues with prices locked in a tight £600 range for the seventh day running.
The leading cryptocurrency by market value fell below $8,000 and found acceptance below the historically strong support of the 30-day price average on June 4, opening the doors for a deeper correction.
However, since then, the downside has been largely restricted to levels near $7,500. Prices did print a low of $7,449 on June 6 before closing at $7,806, according to Bitstamp data. Further, Sunday’s drop to $7,511 was short-lived with prices bouncing back to levels above $8,000 yesterday.
At the same time, the bulls have repeatedly failed to force a sustained break above $8,000 over the last six days.
With prices largely range-bound, the immediate outlook is neutral. A convincing break above the upper edge of the range is needed to put the bulls back in a commanding position. Conversely, a break below the lower edge would again open the doors for a deeper price pullback.
As of writing, BTC is changing hands at $$7,820, representing a 1.2 percent gains on the day, having hit a high of $8,057 earlier today.
BTC is trapped within a falling channel on the 4-hour chart, and the price bounce from Monday’s low of $7,511 has run out of steam.
Further, the moving averages (MAs) are biased bearish. For instance, the 50-candle MA is trending south, having produced a bearish crossover with the 100-candle MA on June 7. The 50-candle MA now looks set to cross below the 200-candle MA.
BTC, therefore, risks falling back toward the lower end of the recent trading range of $7,500–$8,100.
The case for a pullback to $7,500 looks stronger if we take into account the fact that trading volumes dropped sharply in the last 24 hours as the price recovered from $7,500 to $8,090. As seen above, volume bars have been printing lower highs since May 30.
The outlook would turn bullish if BTC exits the falling channel with a high-volume move above the upper edge of the channel, currently at $8,050.
The previous week’s candle closed below $8,000, validating the bullish exhaustion signaled by the preceding week’s doji candle.
Despite the bearish doji reversal confirmation, BTC is flashing green this week. Prices, however, are struggling to find acceptance above $8,000 – the doji candle’s low.
The bearish view would gain credence if the rejection at $8,000 is followed by a drop below $7,500. In that case, a deeper slide to levels below $7,000 could be seen.
Disclosure: The author holds no cryptocurrency assets at the time of writing.
Bitcoin in a vice image via CoinDesk archives; charts by Trading View
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