Bitcoin (BTCUSD) defended the immediate support of $6,000 in the short-term as the recent sell-off is looking over-sold on the technical charts.
The world's largest cryptocurrency by market capitalization fell for the third straight day on Wednesday to hit a three-week low of $6,104 down 26% from the July 24 high of $8,507. BTCUSD price rebound on Thursday from the over-sold territory providing the market with a breather from the sell-off.
All this come after the US Securities and Exchange Commission's (SEC's) decision to postpone any action regarding a bitcoin ETF proposal from VanEck SolidX Bitcoin Trust.
So, there is little likelihood of the bulls making a strong comeback in the short-term. Even so, the bears look to be reaching a point of exhaustion, having engineered a near 90-degree sell-off in the last two weeks.
The technical charts are also indicating the bitcoin market is bound off oversold conditions. As a result, we could be in for a bout of consolidation or a minor corrective rally.
The daily chart of BTCUSD is showing short-term consolidation between $6,600 and $6,300 as the previous mention in our post.
The cryptocurrency has also found acceptance below $6,344 (78.6 percent Fibonacci retracement of the rally from $5,755 to $8,507), which only adds to the overall bearish tone of the market.
Hence, a drop to $6,000 (psychological support) cannot be ruled out, although the bearish momentum is likely to wane as the relative strength index (RSI) is still pointing to the oversold territory (below 30.00).
What to expect in 24 hours?
- The bearish momentum in BTC could slow in the next 24 hours, as the Bitcoin to consolidate between $6,600 - $6,300.
- A corrective rally towards $6,880 and $7,082 cannot be ruled out but the bear could return once the 20-EMA cross the 50-SMA.
- A close below $6,000 would shift risk in favor of a drop to $5,755 (June lows) and could be followed by a "V-shaped" recovery to current levels as the indicators are flashing oversold conditions where bargain hurter are waiting to make quick profits.