Having failed to scale a major resistance level on Monday, bitcoin (BTC) fell below the $11,000 mark soon before press time.
CoinDesk’s Bitcoin Price Index (BPI) rose to an intraday high of $11,660 yesterday, yet closed the day (as per UTC) below the inverse head-and-shoulders neckline resistance of $11,600. The failure to hold above the critical resistance has not gone down well with the market as the cryptocurrency fell to a low of $10,890 today.
The rejection at the inverse head-and-shoulders neckline resistance and today’s break below $11,000 look to have weakened the bull case on the technical charts, and a major positive move looks increasingly unlikely in the short-term.
The 5-day moving average (MA) and 10-day MA are sloping upwards in favor of the bulls. However, the 50-day MA is still pointing bearishly down.
BTC could drop below drop to $10,900-$10,600 as indicated by the bearish set up on the 4-hour chart. However, only a daily close (as per UTC) below the 10-day MA (seen now at $10,837) would signal bullish invalidation.
In the worst case scenario, a daily close (as per UTC) below the descending 50-day MA could yield a sell-off to $7,960 (Feb. 2 low).
On the higher side, a close above the inverse head-and-shoulders neckline would open up gains towards $17,000.