Bitcoin Drifts Down as Price Breaks Below Key $7.8K Support

Bitcoin bears may be in the midst of taking an upper-hand.

At press time, BTC is changing hands at $7,536 on Bitfinex, down 6.9 percent on the day, a figure that also finds the price breaking a key support level at $7,800.

The world's largest cryptocurrency by market capitalization has been largely confined to a narrow price range of $7,673–$7,800, since it broke $8,000 yesterday. However, mounting sell volume continues to apply downward pressure, presenting a bleak outlook for bulls looking to take back the reins.

As such, bulls now are looking for 24-hour volume in excess of 2.4 billion, a threshold that would inspire hope of a reversal.

Hourly Chart

For those eyeing the charts, the extenuated bearish MACD demonstrates high price volatility and negative price action with the signal line (orange line) continuing to plow under.

The above chart shows:

• Topside resistance began at $7,987, with the 55-period exponential moving average acting as a barrier.
• Prices quickly fell away from between $7,987 and $7,802 with a massive spike in sell volume.
• A cascading downside break from the trading range - bearish pattern
• RSI is oversold at 22.9l; it could either turn bearish by dropping lower or it could create a bullish divergence whereby prices continue to drop from the previous hours but the RSI creates a higher high.
• Extenuated bearish MACD - the extension created from the sell-off risks a possible drop further as the bearish histogram continues to play out.

Hourly RSI

The hourly Relative Strength Index (RSI) tells of a fight currently playing out between the bulls and bears as it hangs at 23.142 at press time, presenting a possible weak bullish divergence before the closing period.

If it drops below 22.745 it would expose the lowest levels in three weeks - since July 10. This would create a short-term rebound whereby price action would need to be reassessed.

View

• A drop below 22.745 RSI levels would likely expose bitcoin to a short-term rebound whereby price action would need to be re-analyzed
• An extended MACD creates a new bearish cycle on the histogram - extending the sell-off period by a couple of hours.
• A daily close (as per UTC) below $7,600 presents a bullish-to-bearish trend change and risks toppling the recent two-week climb.

Disclosure: The author hold USDT at the time of writing.

Bitcoin image via Shutterstock; Charts via Trading View