Bitcoin Sinks Toward $8K and Faces Further Sell-Off

Following a failure to capitalize on a recent price recovery, bitcoin could be in for another sharp sell-off, the technical charts indicate.

The cryptocurrency found a temporary low of $8,371 on March 9 and jumped above $9,000 in a convincing manner on March 11, according to CoinDesk's Bitcoin Price Index (BPI). However, the corrective rally seems to have stalled over the past few days.

The cryptocurrency has spent a better part of the last 48 hours moving in a sideways manner in the narrow range of $8,800-$9,400. As of writing, the BPI is seen at $9,095 - down 0.5 percent for the session.

Notably, trading volume has dropped more than 50 percent since March 9, possibly indicating a lack of confidence among traders in the sustainability of the corrective move higher. Should bitcoin see a decisive move above $11,700 (recent high), volumes are likely to climb.

For now, however, the price chart analysis indicates an increased risk of a sell-off to the lows seen in February.
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The probability of bitcoin prices falling below $8,600 (flag support) has increased. A bear flag breakdown could open doors for a drop to $6,000 (February low) and $5,500 (bear flag breakdown target).

On the higher side, only a daily close (as per UTC) above the 10-day moving average (currently seen at $9,619) would signal bearish invalidation.

A convincing break above $11,700 (recent high) will signal a bearish-to-bullish trend change.