With bitcoin prices falling earlier on Sunday, the cryptocurrency now seems destined for the worst weekly loss in over 5 years.
At the time of the press, the main cryptocurrency for market capitalization was trading at $ 3,520 on Bitstamp, with a 36% drop compared to the Monday opening price of $ 5,553. Unless the bulls fail to recover, it is becoming the biggest weekly drop since the second week of April 2013, when prices fell 44.8% from $ 165 to $ 91.
In order for the weekly loss to be confirmed in the rankings, BTC must close today (as per UTC) below $ 3,887, otherwise the resulting weekly loss would be the second largest in 2018: the first is the 30% decline observed in the last week in January.
The weekly performance of Bitcoin
The 33 per cent price drop seems excessive, as for the 14-day relative strength index (RSI). The market, however, does not take into account the oversold conditions reported by this technical indicator.
This is evident from the fact that BTC has continued to find sellers in the last 11 days, despite the record reading of the RSI.
The inability of BTC to produce a stronger corrective rebound despite oversold conditions indicates that the "buy-the-dip" mentality is largely absent.
As seen above, BTC is currently trading below $ 3,760 – the support of the trend line linking the lows of August 2015 and August 2016.
A close below this level would strengthen the already bearish technical approach, represented by the convincing move below the 200-week exponential moving average (EMA) and EMAs down by 5 and 10 weeks.
- BTC may fall to the 200-week moving average support (SMA) of $ 3,126 if prices close today under the support of the rising trendline.
- The downward momentum, however, could weaken in the coming days, as the 14-week RSI is closing in the oversold territory (under 30.00) for the first time since January 2015.
- Prospects as per the weekly chart would remain bearish as long as the 5 and 10 week EMAs continue to move south.
Revelation: The author does not hold cryptocurrency assets at the time of writing.
Image of the BTC chart through Shutterstock; charts of Trading View