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Posted at July 3, 2016 23:27 by Jeremy Cooper in Trendsetter

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Bitcoin (BTC) was trading below $10,000 on exchanges for the first time in 11 days on Tuesday morning (UTC), and may face further losses ahead.

The top cryptocurrency by market value hit a low of $9,713 at 06:00 UTC – a level last seen on June 21 – before regaining some ground. At time of writing, one BTC is worth $10,200, down around 7 percent on a 24-hour basis, as per Bitstamp prices.

The drop saw BTC retrace more than 30 percent of gains from its 17-month high of $13,880 hit on June 26, and more than 60 percent of the four-week rally from lows near $7,500.

Bitcoin’s price drop is hurting the broader market as well. Only seven out of the top 100 cryptocurrencies by market capitalization are reporting gains at press time, according to CoinMarketCap.

That said, most of the losers are outperforming bitcoin, which was the 11th worst performing top-100 cryptocurrency of the last 24 hours, at 09:00 UTC. For instance, EOS and bitcoin cash (BCH) were down 3 percent, while cryptos like ether (ETH) token and XRP reported 6 percent and 4.5 percent drops, respectively.

As a result, a majority of alternative cryptocurrencies are reporting gains in BTC terms. The cryptocurrency market performance of the last 24 hours indicates the investors have likely begun rotating money out of bitcoin and into alternative cryptocurrencies.

With bitcoin’s technical charts signaling scope for a deeper drop toward key support at $9,097, altcoins may continue to shine bright in BTC terms.

BTC DAILY CHART

With the 5- and 10-day moving averages reporting a bearish crossover and the 14-day relative strength index reporting bearish conditions with a below-50 reading, bitcoin appears on track to test support at $9,097 (May 30 high).

Supporting the bearish case is the recent drop in the Chaikin money flow index from 0.37 to 0.13 – a decline indicating weakening buying pressure.

The outlook as per the daily chart would turn bearish if the cryptocurrency prints a UTC close below $9,097, violating the bullish higher-lows and higher-highs pattern.

The case for deeper losses would weaken if the price finds acceptance above the June 27 low of $10,300, although as of now that looks unlikely.

4-HOUR CHART

The previous 4-hour candle closed well below $10,300 (see yellow line), confirming a bearish lower-highs and lower-lows pattern.

The breakdown is backed by high sell volume (red bars). In fact, sell volumes have been consistently higher than buy volumes ever since BTC topped out at $13,800. As a result, a drop toward $9,097 looks likely.

The Chaikin money flow has turned negative for the first time since June 10 – a sign the cryptocurrency is now facing increasing selling pressure.

The outlook would turn bullish if the price clears the descending trendline hurdle at $11,100 on the back of strong buy volumes. That would open the doors to a retest of the recent high of $13,880. After all, the long-term charts are still biased bullish.

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