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Bitcoin’s slump may reverse with breach of descending channel

Namrata Shukla

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Source: Pixabay

Bitcoin’s price noted a crucial 32.87% surge on 26 October, that helped it to recover from September’s fall. The surge raised the price of Bitcoin ailing at $7,393 to $9,819.92. However, the largest cryptocurrency in the market could not keep up the price and began its descent to the bearish end. It fell by 22.62% bringing it back to the $7k bracket. It fell under the important support at $7,875 and was valued at press time, at $7,171.02 with a market cap of $131 billion.

Despite the eroding price of BTC, a trend reversal has been expected with a breach in the bullish pattern in the long term.

Daily 

Source: BTC/USD on TradingView

Source: BTC/USD on TradingView

The daily chart of Bitcoin denoted a descending channel marked along with the falling price. The downward sloping trend lines bridged lower highs at $8,787.14, $8,592.07, $8,228.53, and $8,095.52 and lower lows at $8,583.20, $7,421.64, and $7,191.10. As the volume reacted to the falling price, the coin has been expected to rise once it moves out of the channel.

The bearishness in the market was highlighted by the 50-day MA crossing over the 100-day MA, 63 days ago. The coin has suffered a 28.36% loss and has slipped from $9,913 to $7,102.16. With the averages taking a position above the candlesticks, a bearish trend has set in and could be reversed with the breach of ascending channel.

Source: BTC/USD on TradingView

Source: BTC/USD on TradingView

The MACD indicator reflected the declining market as the MACD line underwent a bearish crossover, however, it noted a reduced momentum. The Relative Strength Index [RSI] dove in the oversold zone, marking a bearish period.

Conclusion 

According to the daily chart and indicators of BTC, a strong bearish presence was noted in the market. However, a reversal of this trend with a breach of the descending channel may be imminent.

Namrata is a full-time journalist at AMBCrypto covering the US and Indian market. A graduate in Mass communication, while majoring in Journalism, she writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.

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