Bitcoin started Monday at $105,791 and surged to a high of $110,587. It closed with gains exceeding 4% as optimism returned to the market.
However, it failed to maintain the same trajectory on Tuesday as it grappled with notable selling pressure. It retraced to a low of $108,403 but rebounded and closed slightly below its opening price.
The apex coin printed a hammer candlestick during price action. Such a candle pattern only appears at the end of an uptrend. It is worth noting that BTC experienced a four-day surge before the latest event.
Trading action following this candlestick’s support suggests that it will lead to further declines. Bitcoin slightly retraced on Wednesday and is experiencing its biggest drop of the week. BTC opened the day at $108,833 and retraced to a low of $106,144. Down by over 2%, the largest coin shows no signs of halting its downtrend.
The asset is on the verge of breaching one of its critical support levels and may continue to decline as the fundamentals remain negative.
Traders went into panic mode as one of their expectations may take longer than expected. President Trump publicly called on the Federal Reserve to cut interest rates. His call prompted investors to anticipate a cut in the second quarter eagerly.
However, the odds of that happening are almost zero due to the drop in the US dollar index. The instrument dropped to its three-year low, dragging interest rates with it. The decline reduces the authorities’ willingness to announce another cut.
The apex coin has since flipped bearish and shows no signs of recovery. Nonetheless, an increase in DXY will see the asset recover.
Bitcoin See Massive Orders at $104,500
At the time of writing, Bitcoin is experiencing a 3% increase in trading volume. However, this does not guarantee a rebound, as current price action suggests that the asset is seeing a surge in selling pressure.
Readings from order books on Coinglass show traders gearing up for further decline. Aside from the notable orders at $105k, they have a massive buildup around $104,500. It is worth noting that the largest coin is seeing significant buying action around $105,700, as the bulls struggle to defend the mark.
Liquidation data reveals that investors lost over $640 million in the derivatives market. They lost over $230 million trading Bitcoin in the past hour, with long positions accounting for 98% of the total REKT capital.
There are no signs of an impending change trajectory as the asset sees a spike in new short positions. They make up over 56% of the total trades in the market.
MACD Flips Bearish
The MACD exhibited a bullish divergence on Tuesday as the bulls struggled to sustain the previous day’s increase. The subsequent trading action saw the metric flip negative. The 12 EMA halted its uptrend and is in contact with the 26 EMA as the bearish convergence nears completion.
The ADX continues its downtrend as the price dips further. It shows strong bears presence as it failed to react to Monday’s surge. Its reading is the same as the relative strength index. The metric is at 51, 12 points lower than Monday’s readings.
The highlighted indicators suggest that Bitcoin may lose the $106k support, slipping as low as $103k.
