Bitcoin (BTC) fell below the $7,000 mark on Wednesday, neutralizing the immediate bullish outlook.
More worryingly for the bulls, a further decline towards $6,425 (recent low) would turn the tide in favor of the bears, the technical charts indicate.
The cryptocurrency witnessed a head-and-shoulders breakdown at 09:00 UTC yesterday and fell to $7,000 (target as per the measured height method). The hourly momentum studies (moving averages) were aligned for a bullish move at the time, hence BTC was expected to defend the psychological mark.
However, the sell-off gathered pace early in the U.S. session, pushing BTC down to a low of $6,670, according to Bitfinex data. Interestingly, the drop in BTC prices coincided with a 500 point sell-off in S&P 500 futures.
Since late February, bitcoin and U.S. stocks have been moving more or less in tandem, indicating the cryptocurrency is still being perceived as a risk asset.