Bitcoin has continued its depressing start to the week with a dramatic slump in price towards $8,000.
The rapid decline in price comes after a bearish weekly candle close, which culminated in a 6% drop.
The next major levels of support for Bitcoin are at $7,900 and $7,400, although if the daily death cross comes into play, the correction could drive price far lower.
An exponential moving average (EMA) daily death cross has happened just twice since 2014, with price dropping by more than 60% on both occasions.
Currently, the 50 EMA on the daily chart is sloping towards the 200 EMA at an alarming rate, with the 50 EMA currently residing at $8,800 while the 200 EMA is at $8,680.
The $7,900 level of support was respected throughout October and should provide a brief respite for the battered and beleaguered Bitcoin bulls.
However, the more times a level of support is tested, the weaker it becomes. This could suggest that a violent move down to the $6,750 region is on the cards.
In order for the bulls to regain control over this volatile market, price would need to bounce to above the $8,800 level of resistance and avoid an initial slump below the $7,900 level of support.
The entire cryptocurrency market cap has decreased by a staggering $35 billion in the last three weeks as the hype surrounding Bakkt’s Bitcoin futures launch begins to subside.
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Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.