Bitcoin Price Faces Worst Weekly Loss Since April 2013, Down 36%

Bitcoin prices dropped further early on Sunday. It now looks to be heading for its worst weekly loss in over 5 years.

By market capitalization, the leading cryptocurrency is trading at $3,520 on Bitstamp, representing a 36 percent drop from the opening price of $5,553 on Monday. Unless the bulls can pull off a strong recovery, it is looking to be the biggest weekly drop since the 2nd week of April 2013, when prices fell 44.8 percent from $165 to $91.

For the weekly loss to be confirmed on charts, BTC must close today (as per UTC) below $3,887. Else the resulting weekly loss would be the second biggest of 2018. The first being the 30 percent drop it witnessed in the last week of January.

As per the 14-day relative strength index (RSI), this 33-percent price drop is looking overdone. However, the market is paying no heed to the oversold conditions reported by that technical indicator.

This is very evident from the fact that BTC has continued to find good number of sellers in the last 11 days, despite its record low reading on the RSI.

Bitcoin’s inability to produce a stronger corrective bounce despite the oversold conditions indicates that the “buy-the-dip” mentality is largely absent.

It is currently trading below $3,760. A close below that level would surely bolster the already bearish technical setup.

Our view:

• BTC might drop to the 200-week simple moving average (SMA) support of $3,126 if today prices close below the ascending trendline support.

• The bearish momentum may weaken in the next few days because the 14-week RSI is closing on oversold territory (below 30.00) for the 1st time since January 2015.

• The outlook would remain bearish as long as the 5- and 10-week EMAs continue to trend south.