Bitcoin Price Is Growing Solidly
Bitcoin (BTC) has been bid on solidly so far this week. A move above $10,000 could be seems imminent and would be sure to pull out to the bull trap. Technical analysis is indicative of this.
Bitcoin reached a 4 week low of $8,371 on Friday. Bitcoin was trading in the range of $8,400 to $9,400 over the weekend, according to CoinDesk’s Bitcoin Price Index. As of writing, BTC is seen at $9,885, and is up 13 percent in the last 24 hours, as per CryptoTrader live cryptocurrency prices which are derived from coin-market-cap’s pricing index.
Despite the 14 percent recovery from Friday’s low of $8,371, it’s too early to call a bullish trend reversal, given that BTC is still down at least 18 percent from recent highs above $11,660.
Further, the price action over the weekend is indicative of short-term bear market exhaustion. For instance, on the Bitfinex exchange, bitcoin closed (as per UTC) below the 200-day moving average (MA) on Saturday for the first time since Feb. 5.
Daily Chart – Bitcoin
Despite the bearish daily close, BTC avoided a break below Friday’s low of $8,342 and actually ended up creating a bullish “outside day” candle on Sunday. Prices also closed (as per UTC) above the 200-day MA.
Outside day bullish candles can occur when the candle has a higher high and a lower low than the previous day’s candle, indicating that the bulls have taken over from the bears.
Also, the symmetrical triangle breakout seen on the 1-hour chart below supports the idea of short-term bear market exhaustion.
1-hour chart – Bitcoin
The above chart (prices as per Bitfinex) shows:
- An upside break of the triangle pattern adds credence to the bullish outside day candle (seen on the daily chart) and indicates scope for a rally to $10,134 (10-day MA) and $10,371 (weekly 10-MA).
- The 50-hour MA and 100-hour MA have bottomed out (shed bearish bias).
- Over the last 14 hours, BTC seems to have formed a base around $9,400, possibly indicating the foundations of the next step higher towards $10,000 have been built.
However, the setup on the weekly chart indicates the rally to $10,000-$10,300 could turn out to be a bull trap.
Weekly Bitcoin Price Chart
The above chart (prices as per Bitfinex)-
- BTC created a bearish “outside-week” candle – i.e. last week’s high and low overshadowed the price action of the previous week – indicating the rally from the Feb. 6 low of $6,000 has ended at $11,700 and the bears have regained control.
- The 10-week MA is trending lower, indicating bearish setup.
- The relative strength index (RSI) failed to beat the resistance at 53.00-55.00 and has rolled over in favor of the bears.
Bitcoin Price Chart – Technical Analysis
The hourly chart favors a rally to $10,000-$10,300. A daily close (as per UTC) above the 10-day MA (seen today at $10,134) would confirm a bullish outside day reversal and open doors for re-test of $10,980-$11,000. However, the gains will likely be transient as suggested by the weekly chart.
Meanwhile, a break below last week’s low of $8,342 would open doors for re-test of monthly 50-MA, currently located at $6,339.
Only a weekly close above $11,700 would signal a bullish reversal and shift attention to $17,000.