Bitcoin (BTC) The price dropped below the psychological level of $50,000 on December 4, bolstering a possible “bearish” forecast. Investors, who took advantage of this decline, made a strong purchase move, but the upward trend could not give the desired performance and stopped at the middle border of the descending parallel channel. This chart pattern shows that BTC continues to rule the price action pointing to further losses.
The Price Could Drop Even More!
BTC, which fell below the psychological level of $ 50,000 on December 4, paved the way for more losses. BTC Price action stalled at the middle border of the ruling chart pattern, although bulls tried to retrace losses during the “three straight ups” session between December 5 and December 7.
Bitcoin price is trading below the middle line of the descending parallel channel at around $47,610 as seen on the daily chart. A descending parallel channel is a significantly bearish chart pattern that shows a downward trend that continues as long as the price of an asset stays within the confines of the descending channel.
If bitcoin price fails to rise above the middle border of the descending channel at $49,105, it could decline towards the 200-day Simple Moving Average (SMA) around $46,588. Another drop beyond this level, BTC/USD may cause the chart to label the lower boundary of the channel at $44,637, a 6.37% drop from the current price.
BTC/USD Daily Chart
The downward sloping moving averages and the entry of the Relative Strength Index (RSI) indicator into the oversold region underscores this bearish outlook as Bitcoin is firmly in the hands of the bears.
Additionally, the position of the Moving Average Convergence Divergence (MACD) indicator below the zero line in the negative zone indicates that the market momentum of Bitcoin is currently in a bearish trend. Also, the parabolic SAR is still negative and above the price, which highlights the bearish outlook.
On the other hand, this bullish thesis could be invalidated if the bulls can break the immediate resistance at $48,500. If this scenario occurs, bitcoin price manages to climb above the $53,572 resistance by the upper border of the management channel. This move could indicate that BTC has completely reversed the losses that started on Dec.
A move higher could take BTC to $54,600 and $59,190, the levels of the 100 and 50-day SMAs, respectively.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.