The Bitcoin (BTC) price dropped for the third consecutive day to $86,800 early Wednesday in New York, reversing the previous week’s corrective bounce and facing an approximate 6.0% yearly loss.
In doing so, the crypto major reverses from a six-week-old descending resistance line, justifying the week-start Doji candlestick.
It’s worth noting, however, that momentum indicators like the 14-day Relative Strength Index (RSI) and the Moving Average Convergence Divergence (MACD) portray sluggish momentum, suggesting hardships for the bears.
On the same line, volume is also sluggish, suggesting less liquidity in the market and challenges for traders following the current trend. That said, Bitcoin market capitalization (market cap) also fades the bounce off a month’s low marked earlier in the week. According to Santiment, Bitcoin’s daily trading volume retreats from a four-day high to $32.85 billion, while the market cap also declines to $1.73 trillion at the latest.
Notably, a lack of major data/events and the year-end holiday season could also challenge the Bitcoin sellers, despite keeping the broad bearish trend.
As a result, an ascending support line from April, near $84,500, captures the market’s attention. Can BTC bears break it? Let’s find out!
Bitcoin Price: Daily Chart Suggests Limited Downside Room
The Bitcoin price extends the early-week pullback from a 10-day high while respecting a six-week-old descending resistance line, currently around $88,300.
In doing so, the Bitcoin price justifies Monday’s Doji candlestick. That said, a Doji candlestick suggests a reversal in the current price trend.
It’s worth observing that the RSI stays near the 50.00 neutral level and the MACD signals are sluggish (minor histogram), suggesting a lack of directional momentum and challenges for the current trend.
With this, BTC looks set to revisit the 78.6% Fibonacci retracement level of its April-October rise, close to $85,500. However, an ascending trendline support from April, close to $84,500 at the latest, will be a tough nut to crack for the Bitcoin bears.
In a case where the crypto major breaks the $84,500 support, a broad support zone from late March, between $81,500 and $80,500, will act as the final line of defense for BTC buyers, a break of which could direct the Bitcoin price toward April’s yearly low of $74,451.
On the contrary, the Bitcoin price recovery needs validation from $88,300 to approach the 50-day Exponential Moving Average (EMA) hurdle surrounding $93,100.
However, the 61.8% Fibonacci retracement level around $94,250, also known as the “Golden Fibonacci Ratio,” and previous support from May, close to $98K, could challenge the Bitcoin buyers afterward.
It’s worth observing that the 200-day EMA, close to $101,700, will be the last line of defense for the Bitcoin bears.
Bitcoin Price: Four-Hour Chart Lures Sellers
On the four-hour chart, the Bitcoin price seesaws above the 23.6% Fibonacci Extension (FE) of its October-December moves, while reversing the previous pullback from the 200-bar EMA.
Considering the sluggish RSI conditions near the 50.0 neutral level, as well as the sluggish MACD signals (minor histograms), the Bitcoin price is likely to extend the latest pullback toward a horizontal support comprising levels marked since December 01, between $83,800 and $84,500.
Following that, Bitcoin sellers could aim for the 38.2% FE support of $82,260, while its further downside can aim for the 50.0% and the 61.8% FE levels of $78,730 and $75,350 in that order.
Alternatively, the 200-bar EMA hurdle of $90,785 guards immediate BTC upside before the monthly high of $94,810.
In a case where the Bitcoin price remains firmer past $84,810, the odds of witnessing the crypto major’s gradual rise towards the daily chart’s higher levels can’t be ruled out.
Also read: Is Bitcoin New Digital Silver Now? Silver Jumps 130% this Year!
