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Bitcoin’s bullish momentum has weakened to five month lows, according to Chaikin Money Flow indicator.

That, coupled with the bearish lower highs pattern on short duration chart indicates BTC could fall back to the recent low of $9,049 and may even break lower.

BTC may bounce back to $10,300 if sellers again fail to penetrate the support at $9,600.

A UTC close above $11,120 is needed to revive the bullish view.

The bullish mood in the bitcoin (BTC) market is at its weakest in five months, according to key technical indicator.

The Chaikin Money Flow (CMF) study, which incorporates both prices and trading volumes to gauge trend change and trend strength, is currently seen at 0.02 on the three-day chart.

A positive CMF indicates bullish bias. However, the latest reading is the lowest since Feb. 20, which means the market is least bullish on the top cryptocurrency in five months.

Chaikin Money Flow

BTC was trading at $4,000 five months ago, while as of writing, the cryptocurrency is changing hands at $9,800 on Bitstamp – well above the 200-day moving average at $6,270. So, the long-term bias remains bullish.

However, the CMF’s retreat from the 21-month high of 0.40 to the current five-month lows validates the short-term bearish reversal signaled by a bearish lower highs pattern created by bitcoin during the recent pullback from $13,880 to $9,049.

Other short term technical studies are also biased bearish, as seen in the chart below.

Daily chart

BTC faced rejection (above left) at the descending trendline hurdle near $10,200 yesterday and closed below $9,900, leaving a candle with a long upper shadow – a bearish development.

The failure to take out the trendline hurdle also reinforced the bearish view put forward by the descending 5- and 10-day MAs and the bearish crossovers of the 5-, 50- and 10-,50-day MAs.

Further, the relative strength index is reporting bearish conditions with a below-50 print.

Hence, the stage looks set for a drop to the July 17 low of $9,049.

That said, the bears need progress soon, as BTC is again attempting a recovery, having clocked a low of $9,650 earlier today. Over the last three weeks, dips below $9,600 have been consistently short-lived (above right).

If that level continues to hold ground over the next few hours, then buyers may step in, lifting prices to the 50-day MA, currently at $10,304.

That said, the outlook will turn bullish only if prices rise above $11,120, invalidating the lower highs pattern.

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

Bitcoin Price via Shutterstock; charts by Trading View