Bitcoin has fallen to two-week lows near $7,070.
Intraday charts suggest scope for a minor bounce to $7,300.
A UTC close above $7,870 is needed to confirm a short-term bullish reversal.
Acceptance below support at $7,087 would bolster the short-term bearish setup and open the doors for a re-test of recent lows near $6,500.
Bitcoin has potential for a small price bounce after hitting two-week lows early on Thursday.
The top cryptocurrency by market value fell to a two-week low of $7,072 during the Asian trading hours and was last seen changing hands at $7,160 on Bitstamp, representing a 0.8 percent drop on a 24-hour basis.
The week began on a negative note with the cryptocurrency registering a 2.4 percent drop on Monday after facing strong rejection above $7,600.
Since then, the bulls have struggled to make their presence felt despite the weekly chart flashing a golden crossover, a bull cross of the 50- and 100-week averages, for the first time since 2016.
The lagging indicator’s failure to attract buyers is not surprising, given the overall market conditions are currently bearish.
The cryptocurrency has been charting lower highs and lower lows since topping out at $13,880 in June and is currently down more than 45 percent from that level. The short-term technical studies are also biased bearish.
However, intraday charts are reporting seller exhaustion. So, a minor bounce could be seen before a potential deeper sell-off.
Hourly and 4-hour charts
The long-tail attached to the previous hourly candle (above left) is signaling seller exhaustion.
On the 4-hour chart, the RSI is creating higher lows, contradicting the slow drop in prices. That bullish divergence is signaling scope for a price bounce.
Backing that up, the 4-hour chart’s MACD histogram is printing shallow bars below the zero line, a sign of weakening of bearish momentum.
Bitcoin may rise to the 10-day MA at $7,336 in the next few hours. The short-term outlook would turn bullish only above $7,870, though.
A UTC close above the Nov. 29 high of $7,870 would invalidate the lower-highs setup and confirm a short-term bearish-to-bullish trend change.
Currently, that looks unlikely with the MACD histogram printing lower highs above the zero line, confirming the recent drop from highs above $7,600.
The 14-day relative strength index is hovering in bearish territory below 50, having violated an ascending trendline earlier this week.
A break below the immediate support at $7,087, if confirmed, would bolster the bearish setup and open the doors for a re-test of recent lows near $6,500.