Bitcoin Faces Move to $8,200 After Dropping Out of Trading Range

Bitcoin has dived out its recent trading range, opening the doors for a pullback to deeper support levels.  The top cryptocurrency ran into offers around $8,580 at 08:35 UTC and fell through the long-held support of $8,460 in a few minutes to hit a low of $8,340 – a level last seen on Jan. 14, according to CoinDesk’s Bitcoin Price Index.

The drop to nine-day lows confirmed a downside break of the recent trading range of $8,460 to $8,750.  The cryptocurrency had entered consolidation mode during Sunday’s U.S. trading hours after the sudden reversal lower from highs near $9,200 range out of steam at $8,460 – the level, which saw bitcoin turn lower on Jan. 8.

So, it seems safe to say that the pullback from $9,200 has resumed with the range breakdown and a deeper drop to support at $8,200 and $8,000 could be in the offing. At press time, bitcoin is changing hands near $8,415, representing a 2.72 percent drop on a 24-hour basis.

The MACD histogram, which is widely used to gauge trend strength and trend reversals, has crossed below zero, confirming a bullish-to-bearish trend change.  The 5- and 10-day moving averages (MAs) have produced bearish crossover. Bitcoin broke out of a six-month-long falling channel two weeks ago, confirming a long-term bullish reversal. The setup will remain valid as long as prices are holding above $7,700.