MiBitcoin drops to $ 6,000? Technically, there are 4 possible reasons
Technically speaking, it is likely that the decline in Bitcoin’s three-week low is likely to continue downward as a significant boost to the $ 6,000 level. Bitcoin is attributed to four different technical reasons, with the possibility of a trend towards $ 6,000.
The crypto market’s biggest cryptocurrency dropped to 6.252 at 7:15 UTC, according to the Bitfinex stock exchange figures, the lowest since 19 September. At the time of writing, our hand is changing from $ 6,300 in the last 24 hours with a 5% drop.
4 technical details for Bitcoin $ 6,000
The few hours of sales today have also ended the long-standing horizontal movement. Technical indicators, in favor of the sellers, led to a downward trend on long-term graphics. In addition, the major decline in the stock markets this morning led to the failure of BTC to perform well, as the crypto money was still considered a risk factor. As a result, Bitcoin is moving towards $ 6,000. There are four possible reasons for this decline.
Bollinger band degradation
On the daily chart, the Bollinger bands (20, mean moving +2, -2 standard deviations) appear to move horizontally since September 22, representing a clear search for direction.
As a result, the Bollinger bandwidth and the weekly volatility of Bitcoin prices, which are represented by the difference between peaks and peaks weekly, decreased to 21 months and 15 months low levels, respectively.
A long period of low volatility often leads to a large movement in both directions. In the case of BTC, this movement started downwards, breaking the bottom line of the band. This can move more towards $ 6,000.
Technical indicators have sales direction signals
The relative strength index (RSI) broke the rising trend line and entered the drop zone below 50. In particular, there is a trend towards the 30 level, which points to the downward direction and has an oversold territory. This increases the likelihood of continuing sales up to $ 6,000.
Meanwhile, the choppiness index (index of irregularity) fell below the level of 61.8, indicating that the downward movement is strengthening by pointing south. In addition, the MACD has seen a downward movement.
Long-term graphics also maintains sales pressure
The negative transition between the 5-month and 10-month EMAs seems to reflect the downward appearance. This situation seems to have earned more credits with the decline in the last 3 weeks seen in the chart. In particular, the fact that the moving averages have fallen for the first time since September 2014 is a critical point.
Declines in stock markets boost sales pressure
The fact that BTC fell below $ 6,300 came a day after the Dow Jones industrial average (DJIA) dropped 800 points. Bitcoin, the leading cryptocurrency, also does not follow the action in stock markets for the first time. As seen in the chart above, BTC almost imitated DJIA in the last quarter of 2017 and in the first quarter of 2018.
In the following periods, stocks were lower in the face of higher bond yields and pushed BTC down.
While many claim that BTC is a safe harbor, the historical price movement shows that it is actually following the stock markets. In this case, BTC is still struggling to take part in the mainstream. At the same time, it should not be surprised that the struggle of Bitcoin made it even more difficult for investors to feel more confident with other classical safe haven assets such as gold ($ 1,200 per ounce now).