Bitcoin price worries traders as BTC posts 10% weekly losses

Bitcoin price struggles to hold above $27,000 as the second daily trading session in the red leaves investors concerned about deeper corrections. BTC is trading at $27,391, 9.92% below last week’s opening at $29,250 and 1.04% down in the last 24 hours.

Down around 12% from the highs of $31,50 set on April 14, the big crypto remains on traders’ radar as a potential short opportunity into the weekly trading session looms.

Bitcoin Needs To Hold Above The 50 SMA To Avoid Further Losses

Data from TradingView and Coinbase shows that BTC has been struggling to hold above the 50-day Simple Moving Average (SMA) over the last five days, where the downturn was stopped on April 21. Bitcoin bulls were required to aggressively defend this level as a daily close below this it would lead to a massive downturn.

Therefore, a daily candlestick close below the 50-day SMA, currently sitting at $27,120 would trigger massive sell orders that would see the pioneer cryptocurrency drop first toward the $26,000 psychological level and later to the 100-day SMA at $25,030.

Market participants could expect the downside for the pioneer cryptocurrency to be capped here, in the short term. This would give buyers an opportunity to regroup and late investors to buy BTC at a discount, before another recovery is initiated.

BTC/USD Daily Chart

Supporting this move in Bitcoin is the downward facing Relative Strength Index (RSI). The position of this trend-following indicator at 43, below the midline, is an indication that there are more buyers than sellers in the market.

In addition, the daily chart above showed that BTC faced a stiff resistance area on the upside. This is a major supply zone stretching from $28,500 to $32,000, represented by the orange lines. Note that the price was rejected from the same zone in June last year, and went on to tank 44% to set a swinglow below $18,000.

If a similar move were recorded, the flagship crypto would even extend the correction below $25,000 to revisit the 200-day SMA at $21,972 or the local low at $19,568. This would represent a 28% drop from the current price.

On the upside, Bitcoin still looked strong as it traded above all the major SMAs on the daily timeframe. The 50-, 100-, and 200-day SMAs were all facing upward, an indication that the market still favoured the upside.

Demand pressure from these SMAs could propel Bitcoin upward to tag the lower limit of the supply zone at $28,500. A further ascent above the local high at $31,050 would see the bellwether cryptocurrency rise to confront resistance from the upper limit of the supplier congestion area at $32,000. This is where BTC’s upside could be capped in the long term.