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?
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.
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.
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.