With bitcoin prices dropping further early on Sunday, the cryptocurrency now looks to be heading for its worst weekly loss in over 5 years.

At press time, the leading cryptocurrency by market capitalization is trading at $3,520 on Bitstamp, representing a 36 percent drop from Monday’s opening price of $5,553. Unless the bulls can pull off a recovery, it’s looking to be the biggest weekly drop since the second week of April 2013, when prices fell 44.8 percent from $165 to $91.

For the weekly loss to be confirmed on the charts, BTC must close today (as per UTC) below $3,887, or the resulting weekly loss would be the second biggest of 2018 – the first being the 30 percent drop witnessed in the last week of January.

Bitcoin’s weekly performance

The 33-percent price drop is looking overdone, as per the 14-day relative strength index (RSI). The market, however, is paying no heed to the oversold conditions reported by that technical indicator.

This is evident from the fact that BTC has continued to find sellers in the last 11 days, despite the record low reading on the RSI.

BTC’s inability to produce a stronger corrective bounce despite oversold conditions indicates the “buy-the-dip” mentality is largely absent.

Weekly chart

As seen above, BTC is currently trading below $3,760 – the support of the trendline connecting the August 2015 and August 2016 lows.

A close below that level would bolster the already bearish technical setup, as represented by the convincing move below the 200-week exponential moving average (EMA) support and the downward sloping 5- and 10-week EMAs.

View

BTC could drop to the 200-week simple moving average (SMA) support of $3,126 if prices close today below the ascending trendline support.

The bearish momentum, however, may weaken in the next few days, as the 14-week RSI is closing on oversold territory (below 30.00) for the first time since January 2015.

The outlook as per the weekly chart would remain bearish as long as the 5- and 10-week EMAs continue to trend south.

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

BTC chart image via Shutterstock; charts by Trading View