Under Pressure: Bitcoin Price Could Defend $5.6K, Charts Say

Down two-thirds from its peak of $20,000, bitcoin now risks printing fresh 2018 lows below $5,755.

As a result, the leading cryptocurrency fell below $6,000 and extended the slide to $5,859 earlier today - the lowest level since June 29 - according to Bitfinex data.

Further, the bitcoin dominance rate, a measure of BTC's market share, jumped to an eight-month high of 53.7 percent today.

It seems safe to say that the cryptocurrency markets have turned risk-averse, that is, investors are venturing out of the high-risk alternative cryptocurrencies and into well-established cryptocurrencies like BTC, and then possibly on to fiat currency.

Looking ahead, the risk aversion could worsen as the price chart analysis is calling a deeper sell-off in the world's largest cryptocurrency by market capitalization.

As the above chart shows, BTC could encounter support around $5,650.

The cryptocurrency could defend the support at $5,650 in the short-term as the cryptocurrency is looking oversold, having dropped more than 40 percent over the last three weeks.

A high volume break above the falling trendline seen in the 4-hour chart would confirm a short-term bearish-to-bullish trend change and would allow a rally to $6,850-$7,000.

Disclosure: The author holds no cryptocurrency assets at the time of writing.

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