By Omkar Godbole
- Bitcoin’s daily and 12-hour charts indicate the path of least resistance is to the downside.
- A break below immediate support at $9,074 (Feb. 4 low) would expose the support range of $8,700-$8,600, under which the focus would shift to $8,300 (head-and-shoulders breakdown target).
- A corrective bounce to resistance levels at $9,230 and $9,400 may be seen before a potential drop below $9,000, as the hourly chart is reporting seller exhaustion.
- A close above $10,028 (Monday’s high) is needed to turn the tide in favor of the bulls.
Bitcoin dropped to three-week lows early Wednesday, erasing a significant portion of this year’s price rally.
The top cryptocurrency by market cap slipped to $9,095 at 08:30 GMT to hit the lowest level since Feb. 4, according to CoinDesk’s Bitcoin’s Price Index (BPI).
With the drop to multi-week lows, bitcoin has retraced nearly 38 percent of the rise from $6,850 to $10,500 seen in the six weeks to Feb. 13.
The rally may continue to unravel as the bears have been looking stronger in the last 24 hours.
The cryptocurrency fell below $9,400 during Tuesday’s U.S. trading hours, confirming a major bearish reversal pattern on technical charts. Additionally, sellers have breached the widely tracked 50-day moving average (MA) support for the first time since Jan. 3.
At press time, bitcoin is changing hands at $9,140 on Bitstamp, while its global average price as calculated by BPI is seen at $9,175.