Bitcoin spent the last few days trying to break through the upper swing area between $85,578 and $87,374, but buyers could not get the price above the ceiling.
Friday’s high reached $87,144, just short of the upper extreme. Monday’s high was a little lower at $86,969, and yesterday’s high stalled at $86,677 before rotating to the downside. Those progressively lower highs suggested the upside push was losing momentum.
Buyers had their shot. They could not finish the job.
The moving average breaks gave sellers the shove
Despite the failed attempts near the highs, buyers continued to lean against the rising 100-hour moving average — the blue line on the chart below — and the rising 200-hour moving average, shown in green. Those levels helped keep the recovery alive.
That changed today.
The price broke below both moving averages, shifting the short-term bias in favor of the sellers. With support giving way, downside momentum accelerated and took bitcoin to $82,734. That low was just inside the upper boundary of the next swing area between $81,517 and $82,833.
See the hourly chart below.
Sellers have control, but another hurdle remains
The moving average breaks were a win for sellers. However, extending that control requires more work.
The $81,517–$82,833 swing area is the next key test. Trading near its upper boundary puts the area in play, but sellers still need to push through the zone and get below $81,517 — and stay below it. That would strengthen the bearish bias and open the door for further downside momentum.
Conversely, if buyers can hold support within the area and move back above $82,833, they would have a foothold for a recovery. The broken moving averages would then become the upside targets and resistance:
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200-hour moving average: $84,799
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100-hour moving average: $85,269
Moving above the 200-hour MA would begin to repair the technical damage. Getting above both moving averages and staying above them would shift the short-term bias back toward the buyers.
Until then, sellers retain the advantage.
Trader education: Support defines risk, but buyers need follow-through
For newer traders, the lesson is that failed attempts at resistance become more meaningful when support finally breaks. The lower highs were a warning. Today’s move below the moving averages supplied the shove.
The lower swing area now gives buyers a place to lean and define their risk. However, holding support is only the first step. Buyers also need to reclaim broken levels to show they are taking back control.
Hold the swing area and buyers have a chance to regroup. Break below $81,517 and stay below, and sellers strengthen their grip.
This article was written by Greg Michalowski at investinglive.com.