Bitcoin price: here’s what a closely watched technical indicator suggests
- Bitcoin trades near $21.2k, with 1.3% and 12% losses in the past 24 hours and 7days respectively
- The closely watched MACD suggests further weaknesses amid risk-off sentiment.
- Analysts say Bitcoin price could fall below $20k and retest key support levels if bearish pressure continues.
Bitcoin (BTC/USD) remains perched above $21,000 on Monday morning, having scrapped through the weekend without breaching the psychological $20,000 mark.
However, having touched lows of $20,700 over the weekend, and intraday lows of $20,900 so far today, the benchmark crypto could yet see new losses. Bitcoin’s 24-hour performance is -1.3%, while over the week, it has lost more than 12%.
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Bitcoin’s bearish outlook
The risk-off sentiment across risk markets continues following last week’s negative closes for equities and crypto, with fresh fears over the US Federal Reserve’s likely push for another 0.75% rate hike.
A look at the daily chart shows the moving average convergence divergence (MACD) has flipped negative.
The closely watched indicator, which technical analysts use to gauge potential momentum direction, has the short term outlook for BTC in the bearish zone. The MACD, as shown in the chart above, remains below the signal line, with the bearish crossover having seen sellers push Bitcoin from highs above $25,000 last week.
The 50-day moving average is also providing an immediate resistance after price broke below in a -10% return on 19 August.
The monthly Relative Strength Index (RSI) indicator is also suggesting possible downside for Bitcoin, in comparison to the metric’s outlook in previous bear markets.
“There are initial signs that the Monthly BTC RSI 2015 & 2018 Bear Market Bottoms area (green) is turning into new resistance. If this trend continues, this could spell further downside in Bitcoin’s price over time,” crypto analyst Rekt Capital noted in a tweet on Monday.
Pseudonymous crypto analyst Alt Crypto Gems also sees a possible flip below current support. Pointing to the 4-hour chart and the appearance of another bearish indicator, the analyst opines BTC/USD may fall to support levels near $16,000.
Bitcoin fell to lows of $17,600 in mid-June amid the bear market turmoil, which makes current levels crucial. Notably, on-chain and technical analyst Cauê Oliveira noted last week that the levels of “maximum pressure” for Bitcoin could be around the $14.5k -$10k zone.