Bitcoin Is Back Above $11,500, But Bulls Not Out of the Woods Yet
Despite a sharp price recovery to over $11,500 today, bitcoin’s bulls are not out of the woods yet, the price charts suggest.
Coindesk’s Bitcoin Price Index (BPI) has climbed 25.9 percent from the eight-week low of $9,199.59 hit yesterday at 15:44 UTC. As of writing, bitcoin (BTC) is trading at $11,590 levels.
The world’s largest cryptocurrency by market capitalization has appreciated by 8 percent in the last 24 hours, according to data source OnChainFX.
The price chart analysis indicates that only a close (as per UTC) above $12,500 (prices as per Coinbase) would add credence to rebound from sub-100-day moving average (MA) levels and confirm that a short-term bottom is in place.
Bitcoin chart: Bottom in place?
- As seen on the chart above (prices as per Coinbase), bitcoin has consistently left higher lows at/below the 100-day MA line.
- On the previous two occasions, the relative strength index (RSI) showed oversold conditions.
- As of today, the RSI is staying within the oversold territory (above 30.00). Bitcoin’s drop below the 100-day MA yesterday was short-lived.
The situation looks similar to that seen in mid/late March 2017, when BTC prices flirted with 100-day MA for more than a week before moving higher. Back then, the RSI was just shy of oversold conditions
Still, it appears to be too early to call a bottom.
Yesterday’s long-tailed candle (big difference between intraday low and UTC close) does show strong dip demand. However, only a positive close today would validate the sharp recovery from $9,005 (previous day’s low).
Bitcoin chart: Bulls need a close above $12,500
The above chart (prices as per Coinbase) shows:
- A long-tailed candle indicating dip demand near the ascending trendline (drawn from July low and September low) support.
- Lower highs and lower lows as indicated by the descending trendline and a drop below $12,500 on Tuesday.
- 5-day and 10-day MAs carry a strong bearish bias (sloping downwards).
- The RSI remains below 50.00 (in the bearish territory).
Except for the first point, all other factors favor a drop to $8,690–$8,052 (61.8 percent Fibonacci retracement of 2017 rally).
- The recovery from $9,005 has neutralized the immediate bearish outlook.
- The daily chart suggests that a historical pattern (higher lows along the 100-day MA) could be repeated.
- However, only a close (as per UTC) above $12,500 (Dec. 30 low) would confirm a bottom is in place at $9,005 (previous day’s low) and open the doors for a rally to $15,800 (descending trendline hurdle) and beyond.
- The sell-off would resume if BTC fails to hold above the 100-day MA over the next 48 hours. In such a scenario, prices could test $8,690–$8,052 (61.8 percent Fibonacci retracement of 2017 rally).
Creepy forest trail image via Shutterstock
The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Interested in offering your expertise or insights to our reporting? Contact us at [email protected].
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.