Bitcoin Price Analysis: What’s All the Fuss About?

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Bitcoin Price Analysis: What’s All the Fuss About?

A nearly 10% drop over the last 24 hours has brought back fears of a bearish reversal. Will this current pullback put a dent in the most recent rally or is it just a short-term sell off?

Highlights

To date, April has been a fantastic month wherein bitcoin recovered nicely from February and March lows, but yesterday BTC and other majors displayed signs of bearish exhaustion as the market became overbought after crossing $9,700.

Daily Chart

  • BTC bounced off the $9800 resistance near the 200-day MA while the correction has been a little troubling, the longterm set up for BTC remains positive.

4 Hour Chart

  • BTC fell below the $9,200 support and currently trades in a rather tumultuous range between $8,700 – $8,900, but the bullish trend appears secure as BTC is still above the downward trend line. The 50-day MA is above the 100-day MA and both orient upwards. A similar set up can also be seen with the 100 and 200-day MA.

  • In the event that BTC continues to descend, $8,400 is the nearest support, and last week’s 50-day MA near ($8,500) was the threshold BTC needed to cross in order to open up the rally towards $10,000. A drop below $8,400 could signal bearish reversal which could push BTC lower towards $7,500.

  • At the time of writing the 5-day EMA and 10-Day MA continue trending south, and the Stoch has flatlined, indicate further decline or range bound trading.

Vision:

  • The long term outlook for BTC is still overwhelmingly positive and the path towards $10,000 should resume after this dip.

  • A close below $8,500 would break the pattern of higher highs and lower lows, strengthening the chance of a bearish reversal.

  • $8,600 – $8,900 remain a testy area with $8,400 serving as the most immediate support.

  • A moderate correction should not be a surprise after such a robust 35% gain since early March.

  • At the time of writing the Stoch and MACD indicate oversold conditions while the RSI has flatlined near 43 but upon reversal the rally towards $10,000 and above should recommence.

Disclaimer: The views expressed in this article are not intended as investment advice. Market data is provided by BITFINEX. The charts for analysis are provided by TradingView.

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