Bitcoin Price Faces Struggle to Hold Above $11K After Range Breakdown
• Bitcoin’s short duration charts indicate the bears are in control and prices could drop below $11,000.
• A strong bounce from the 5- and 10-week moving averages at $10,804 and $10,625, respectively, could fuel a rise back to $12,000.
• A high-volume weekly close (Sunday, UTC) or a back-to-back daily close above $12,000 is needed to revive the bullish outlook.
Bitcoin (BTC) could drop below $11,000, after sellers took victory in a four-day-long tug of war with the bulls.
The top cryptocurrency’s trading range had tightened in the four days to Aug. 9, with prices printing lower highs above $12,000 and higher lows in the range of $11,200 to $11,650.
That contracting triangle pattern represented a stiff battle between the bulls and the bears, as well as bullish exhaustion following a 35 percent rally from July 28 lows near $9,100.
A range breakout would have meant a continuation of the uptrend. Prices, however, dived out of the narrowing price range on Saturday, confirming victory for the bears.
The range breakdown had been expected, as a key technical indicator on the intraday charts was flashing signs of bearish reversal.
So far, the downside has been restricted to levels around the former resistance-turned-support of $11,100. The cryptocurrency dipped to a low of $11,080 on Sunday before rising back above $11,500 earlier today.
As of writing, BTC is changing hands at $11,355 on Bitstamp, representing little change on a 24-hour basis.
BTC fell from $11,871 to $11,200 in the 60 minutes to 12:00 UTC on Aug. 10, confirming a downside break of the narrowing price range. The breakdown was backed by a surge in selling volume.
Bitcoin has dived out of an inverted flag – a continuation pattern that accelerates the preceding bearish move.
The flag breakdown has opened the doors to $10,800 (target as per the measured move method)