The bitcoin price failed at the 21-day moving average on Saturday, and ended up falling back to $3,500. This was reinforced by the declining 5 and 10-day exponential moving averages (EMA) and also the bearish 14-day relative strength (RSI) index at 42.00.
The probability of a drop below the $3,500 level has increased lately and if that happens it would strengthen the bearish setup leading to a test of the Decembers lows near $3,100.
However, this bearish scenario would be weakened if the price close above the $3,732 level.
BTC’s pullback from the 21-day MA may embolden the bears to push prices below $3,500. Acceptance below that level would expose the December low of $3,122. A convincing move above the 21-day MA of $3,732 would weaken the bearish case and open up upside towards $4,000. However, the primary trend is bearish, so forcing a move above the 21-day MA could be a tough task for the bulls.
24 hours ago, BTC was trading at $3,539 according to CoinDesk data. The high has been just $3,558 and the low $3,496 a spread of just $62 dollars. At 20:05 Central Standard Time Bitcoin was trading at $3,541 just two dollars above its open.
As we said yesterday bitcoin price appears to be consolidating as it trades sideways in a narrow range before making any significant move in either direction.