- Bitcoin fell $1,100 on Thursday, creating a bearish candle on the daily chart and confirming a bearish divergence of a key indicator.
- Prices risk falling to the 30-day moving average (MA), currently at $7,342, in the next few days.
- The pullback could be short-lived, as BTC tends to perform well in June, and the long-term bull case is still intact.
- The case for BTC extending its four-month winning streak in June would weaken if the price finds acceptance below the 30-day MA.
Bitcoin is teasing short-term bearish reversal at the onset of the historically good month of June.
The premiere cryptocurrency is currently trading at $8,300 – down 4.5 percent on a 24-hour basis – after having hit a new 12-month high of $9,097 on Thursday.
The rise above the psychological level of $9,000 was short-lived, as expected, with prices falling back to $8,600 by 16:15 UTC. The cryptocurrency went on to hit an intraday low of $8,000 before printing a UTC close at $8,378.
The sudden $1,100 pullback from one-year highs ended up engulfing the price action seen in the previous three trading days – a sign of buyer exhaustion.
Further, prices closed below the key support of $8,390 (May 16 high), invalidating the bullish higher high established above that level on May 26.
The price pullback looks to have legs, as trading volumes on Bitstamp doubled on Thursday as prices dropped. BTC, therefore, could remain on the defensive in the first week of June.
However, the bulls may get a boost, as historical data shows the cryptocurrency tends to do well in the final month of the second quarter.
- BTC has scored gains in June in five out of the last seven years.
- Prices fell 14.77 percent last year, snapping the three-year June winning run.
- The 27.85 percent price rise seen in 2012 is bitcoin’s best June performance to date.
BTC created a “bearish outside day” candle on Thursday, which occurs when the day begins on a positive note but ends with…