Bitcoin (BTC) has been trading sideways in a narrow range over the last week, but a drop toward $8,000 may be on the way, the technical studies indicate.
As of writing, BTC is changing hands at $8,346 on Bitfinex. Meanwhile, CoinDesk's Bitcoin Price Index (BPI), which represents the average of BTC prices on the world's leading exchanges, is seen at $8,306 - little changed from the previous day's close (as per UTC) of $8,380.
The cryptocurrency peeped above the $9,000 mark on March 20, according to Bitfinex data, but resistance at $9,200 has proved a tough nut to crack. Meanwhile, bearish chart signals suggest a drop in prices is likely, though the 4-hour 50-MA has likely capped the downside around $8,200.
sThe relative strength index (RSI) has breached the descending triangle to the downside, signaling the BTC will likely see a downside break of the trading range.
On the other hand, the 50-MA has bottomed out and looks set to cut the 100-MA from below (bullish crossover). The crossover will likely happen in the next few hours if BTC moves above $8,700, thus possibly opening the doors for an upside break of the trading range.
A bullish break may not necessarily yield a sharp rally to $10,200 (target as per the measured height method), though, as bitcoin will likely face stiff resistance in the range of $9,280 to $9,470:
The descending 5-week moving average resistance is seen at $9,210.
The 200-day moving average is seen at $9,284
Double top neckline resistance (former support) stands at $9,280 (Feb. 25 low).
The 50-day moving average resistance is seen at $9,392.
The descending 10-week moving average is lined up at $9,411.
50 percent Fibonacci retracement of the recent drop is $9,470.
So, on the higher side, only a daily close (as per UTC) above $9,470 would allow a stronger rally to $10,200.
Meanwhile, on the downside, acceptance below $8,200 could embolden the bears and could yield a sell-off to $7,240 (March 18 low).
