As selling pressure continues to dominate the cryptocurrency segment, and very few of the top coins show signs of stability, the bull market is still clearly in danger. While most of the majors are trading above the weekend lows, and Bitcoin held the key support near $5850, the snapback rally lacked bullish momentum.
Correlations are high, as segment-wide trends move most of the smaller coins as well, and that points to further volatile trading and a bearish bias in the coming period. As the previously stronger coins, such as ETH, XRP, IOTA, and EOS has been showing weakness, the odds of a major technical breakdown increased.
That said, as the top two coins are still in bullish long-term patterns, and until a clear and durable break below support, BTC is in a secular uptrend, while ETH is well above its respective line-in-the-sand support level.
BTC/USD, Daily Chart Analysis
Bitcoin continues to trade in a strong short-term downtrend, just above key long-term support, and the momentum indicators haven’t reached oversold readings yet. In the case of a breakdown below $5850, a move to $5000 is likely with a weaker support level found above that at $5500. The zone around $6350 provides primary resistance, with further levels at $7000, $7350, and $7650.
As we stated before, a break below the strong support zone near $5850 would be the first similar event since the beginning of the bear market in 2014, and it could lead to an extended period of bearish bias for Bitcoin after the spectacular bull run of 2017.