Over the last month, BTCUSD is trading within the $8,000-10,000 range. Since May 5, when the price bumped into the psychological resistance of $10,000, the coin is mostly nursing losses. Bitcoin crashed to almost $8,000 overnight and tries to regain ground on Thursday, but the pair obviously lacks the bullish impetus.
From the technical point of view, it looks like the digital currency is ready to make another break lower, and this risk persists as long as the price is trading below the 100-DMA at $8,800. The fact that the 100-DMA is below the 200-DMA signals a high probability of resuming the bearish trend in the short term. Should bitcoin finish the week above $8,000, the downside risk will somehow recede.
On the whole, despite the cryptocurrency market remains rather volatile, the price moves have become more measured and logical. The BTCUSD pair is hardly ready for a rally at this stage, but the downside risks are limited either. Considering that bitcoin acceptance continues to grow, and more institutional investors engage in this industry, following a possible deeper retreat, the coin will attract decent demand.
By Helen Rush
Senior Analyst at Capital Markets