Bitcoin (BTC) continued its downward trend on February 4, with the leading cryptocurrency in the market experiencing a further pullback in its recent decline, despite technical indicators being unable to support a bull run in the crypto market.
At the time of writing, Bitcoin is trading at $76,280, down about 2.49% over the last 24 hours as the cryptocurrency market continued to feel the effects of the ongoing sell-off, based on CoinMarketCap data.
The decline occurs as investors are paying close attention to whether Bitcoin can build upside momentum after weeks of weakness. Although the latest decline appears increasingly mature from a structural standpoint, investors have yet to witness the strength that is usually associated with a trend change.
Bitcoin Tests Key Structural Support
However, even with the retreat, there are those who believe that the decline in the price of the cryptocurrency follows a technical pattern. More Crypto Online tweeted on February 4 that the decline from the November low has been in line with expectations, completing the initial move up before resuming the next leg down.
This puts BTC in a price area where a base could form. From a structural perspective, much of the correction could be over, but analysts are quick to caution that this does not mean that a bottom is in place.
However, there will be further downside potential if Bitcoin is unable to break out. In order for Bitcoin to reverse, a strong move up is needed, a break above early resistance levels, and a clear impulsive move up on lower timeframes.
Bitcoin Bulls Await Clear Confirmation
The focus is shifting from new downside targets to signs of renewed control by the buyers. A few minor moves up or isolated green candles do not constitute a change in trend. We need follow-through, and this should be accompanied by increasing volume and improving momentum indicators.
Until confirmation is received, analysts will continue to be cautious. Until there is an upside to the market, the price of BTC will continue to be volatile, especially in a risk-off market.
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Weekly Indicators Signal Continued Pressure
The weekly chart shows that the momentum is still weak. Bitcoin’s RSI is at 32.2, which is still below 38.8, indicating that the selling pressure is dominant despite Bitcoin’s price approaching key reactive zones.
BTC is trading below several major technical indicators, which include the 50-week simple moving average priced at $100,377, the 20-week simple moving average priced at $96,588, and the 100 simple moving average priced at $87,465. The price is falling towards the 200 simple moving average, priced at $58,116.
This is supported by the Moving Average Convergence Divergence (MACD) indicator, which is bearish. The MACD line is currently near $4,494, and the signal line is near $4,424.
Also Read | Bitcoin (BTC) Slides After Failed Recovery Bears Push Price Toward Support
