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Bitcoin could fall below $10,000 this week as a strong sign of buyer exhaustion have emerged on the weekly chart in the form of “gravestone doji” candle.

A bear cross of short-term moving averages and weakening buy pressure on the daily chart also suggest scope for a drop.

The case for a price retreat into the four digits would weaken if bitcoin jumps above $12,450, invalidating a bearish pattern on the 4-hour chart. That would open the doors to a retest of the recent high of $13,880.

With the technical charts flashing signs of buyer exhaustion, bitcoin (BTC) risks falling to levels below $10,000 this week.

The top cryptocurrency by market value rose to a 17-month high of $13,880 last Wednesday only to end the week on Sunday (UTC time) with a 0.66 percent loss at $10,760, according to Bitstamp data.

Essentially, BTC created a candle called “gravestone doji” on the weekly chart, which comprises of tall upper shadow (marking a big gap between the open and high) and little or no lower shadow (meaning low and close are almost identical).

The narrative behind the candle is that buyers had pushed prices up to unsustainable levels during a specific period, then sellers ended up pushing prices back to the starting point.

This sort of price action, if witnessed following a stellar rally, is widely considered a sign of bullish exhaustion and an early warning of an impending price drop. That may well be the case here, as the gravestone doji formed after bitcoin reached 17-month price highs.

As a result, BTC could be quoted in four digits across cryptocurrency exchanges later this week. As of writing, the cryptocurrency is changing hands at $11,000 on Bitstamp, representing a 6.5 percent drop on a 24-hour basis.

It’s worth noting investors may view any pullback to levels below $10,000, as just another chance to get involved in the bull market. After all, a number of bullish price drivers are lined up over the next few months, according to Alex Kruger, a prominent technical and fundamental analyst.

Weekly chart

BTC created a gravestone doji last week with the biggest red volume (selling volume) bar since November.

Further, the candlestick has appeared following a near 90-degree rise from levels near $4,000 seen at the beginning of April and the relative strength index (RSI) continues to report overbought conditions with an above-70 print. Therefore, the case for a price drop to $10,000 looks strong.

It is worth noting that the 5- and 10-week moving averages are still trending north, indicating a bullish setup. As a result, the averages, currently located at $9,840 and $8,757, could fuel a price bounce.

Daily and 4-hour charts

As seen on the daily chart (above left), the Chaikin money flow index has retreated sharply from 0.39 to 0.19 in the last five days – a sign of weakening buying pressure. The oscillator takes into account both the price and trading volume to gauge buying and selling pressures.

The 5- and 10-day MAs are also teasing a bearish crossover. Over on the 4-hour chart, meanwhile, the cryptocurrency has carved out a bearish lower high at $12,448.

Overall, both charts are aligned in favor of a short-term drop to levels below $10,000. The bearish case, however, would weaken if the price breaks above $12,448 with high volumes. In that case, BTC could revisit the recent high of $13,880.

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

Chart image via Shutterstock; charts by TradingView