Bitcoin Risks Drop Toward $8K After 3-Week Low

Bitcoin is on the back foot having hit three-week lows over the weekend and now risks deeper losses below $8,200, the technical charts indicate.

The ensuing corrective rally was also short-lived: BTC failed to beat the descending 5-day moving average hurdle, seen yesterday at $8,760 and fell to a low of $8,271 today.

The price action indicates BTC is clearly not out of the woods yet and if anything, the bear grip seems to have strengthened over the last few days.

The bear flag breakdown indicated on the chart signals a continuation of the sell-off and has opened the doors to $7,300, although the target looks far fetched as of now.

The pattern does indicate scope for a drop below $8,000.

The relative strength index is biased to the bears and the 100-candle moving average and the 200-candle MA continue to slope downwards, also in favor of the bears.

The chart shows the rally from the April 1 low of $6,425 ran out of steam near $10,026 and the 5-month and 10-month MAs are beginning to slope downwards in favor of the bears for the first time since September 2014.

The short-term trend remains bearish as indicated by the downward sloping 5-day and 10-day MAs.

This, coupled with the bearish development on the hourly and monthly charts, indicates that bitcoin will likely find acceptance below key support at $8,270 and $8,207.

BTC looks set to take out support at $8,207 and could then drop to $7,787 or even as low as $7,698.