Bitcoin at risk of deeper drop as BTC slips below key support levels

Key point:

• Selling accelerated on Tuesday, raising the chance for a Bitcoin price drop to $104,000.

Bitcoin pulled back to $105,250 on Tuesday after failing to cross above the $109,000 mark on Sunday and Monday. Bitfinex analysts said in a market report that Bitcoin could have formed a local top or may enter a period of consolidation. 

Let’s study the charts to determine the crucial support and resistance levels to watch out for.

Bitcoin price prediction

Bitcoin has been sandwiched between the downtrend line and the moving averages, indicating a possible range expansion in the next few days.

The upsloping moving averages signal a slight edge to the bulls, but the relative strength index (RSI) near the midpoint suggests a lack of bullish momentum. If the price slips and sustains below the moving averages, the pair could slump to $104,500 and below that to $100,000. Such a move retains the pair inside the bearish descending triangle pattern.

The bearish setup will be invalidated if the price rebounds off the moving averages and rises above the downtrend line. That could propel the pair to the neckline of the inverse head-and-shoulders pattern.

The pair has broken below the moving averages, indicating profit-booking by the short-term traders. Buyers are expected to defend the $104,500 level with all their might because if they fail in their endeavor, the pair could sink to the psychological support at $100,000.

The first sign of strength will be a break above the 20-exponential moving average. That clears the path for a rally to the downtrend line, where the bears are expected to step in. If buyers pierce the downtrend line, the pair may challenge the all-time high at $111,980.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.